Postweek Reports

Best Value & High Momentum smallcases

Best Value & High Momentum smallcases
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smallcases Offering Best Value

Value investing means investing in stocks that are available at sort of a discount. A value investor buys stocks that are trading at less than their intrinsic value. The intrinsic value of a company is its actual value, one that is not affected by external factors. It is exactly like buying good products at a discount. It has been practiced by investment stalwarts like Benjamin Graham and Warren Buffett. There have been numerous studies on the value investment strategy that have concluded that this approach enables investors to beat the market over time.

Strategy & Model smallcases:

  1. With a PE of 7.98, Thrift Shopping smallcase is trading at 65% discount to Nifty PE of 22.46. The smallcase has generated 18.76% return in last one month! The strategy combines Joel Greenblatt’s Magic Formula and Piotroski’s F score to select financial robust companies that have been utilizing their capital efficiently.
  2. With a PE of 10.55, Growth & Income – Mid-Cap Version smallcase is trading at 53% discount to Nifty PE of 22.46. The smallcase has generated 8% return in last one month!

Thematic & Tracker smallcases:

  1. Among the popular themes on the platform, Banking Privately smallcase is trading at the highest discount. The current PE of the smallcase is 15.7, which is almost 30% less than the Market PE of 22.46. This smallcase comprises private banks and NBFCs that are an advantageous position compared to government banks, which have been suffering from low profitability and high amount of bad loans.
  2. The current PE of the Electric Mobility smallcase is 17.27, which is almost 23% less than the Market PE of 22.46. This smallcase comprises companies that are investing in the electric vehicle ecosystem and are expected to grow with growth in electric mobility.

smallcases with Highest Momentum

Momentum is a trend following philosophy. It believes that all information is reflected in the price – there are enough people in the market doing different types of research, and if collectively they are driving the price of a stock higher by buying more of it, then you should also buy the stock and vice-versa.

Strategy & Model smallcases:

The Magic Formula smallcase is up by 14% in the last one month. Its index value is currently 10% above the 90-day exponential moving average. The strategy invests in stocks with high earnings yield and returns on capital.

Thematic & Tracker smallcases:

Realty Tracker smallcase has generated a return of more than 18% in the last one month. It has the highest momentum rank among all the thematic and tracker smallcases. The smallcase consists of companies which can be used to efficiently track and invest in the realty sector.

Markets Update

With continued inflows from the foreign investors and increased expectation of BJP led coalition again forming the central government, markets closed in the green for the sixth straight week.

Benchmark Nifty index ended the week up 1.46% at 11,624 and Sensex closed up 1.33% at 38,673.

Making smalltalk

Read about Post Earnings Announcement Drift (aka PEAD), one of the coolest theories in investing which states that when stocks experience an earnings surprise, they have a tendency to drift in the direction of the surprise for several weeks up to 3 months.

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Best Value & High Momentum smallcases