It fell like the proverbial house of cards.
The 30-stock benchmark of the Indian stock exchange, the Sensex, recorded its biggest crash on January 21. The index closed the day at 17,605 points, down a precipitous 1,400 points.
While the event is likely to send shudders down the spines of investors across all age groups for the young brave hearts amongst you we have got ten stock picks that can make you millionaires.
The caveat, however, is that you need to hold them for a long period: ten years if you can to reap the benefits of picking stocks that will create value for you.
We asked brokerage house K R Choksey Shares and Securities to hone in on ten stocks that will create value for investors in the long run. Gaurang Shah, vice president, equity research at K R Choksey Shares and Securities came up with these ten gems for long term investors just a few days before January 21. Over to him.
Here are our top picks which have the potential to be multibaggers ( a stock that grows manifold over a period of time) if held with an investment horizon of ten years: Large caps are selected because of their proven track record and ability to grab mega opportunities through their financial strength. Mid caps if the management has the vision and management band width to scale up rapidly to become large caps.
They are grouped under the following themes:
Commodities:
~ Reliance Industries [Get Quote] (Perennially evergreen company)
~ Reliance Petroleum [Get Quote] (Largest refinery with very high Nelson complexity index that will lead to highest gross refining margins, GRMs)
~ Gujarat NRE Coke [Get Quote] (integration from coking coal to coke)
~ Tata Steel [Get Quote] (formerly Tisco; lowest cost producer of steel plus large value addition through Corus acquisition)
~ Hindalco [Get Quote] (lowest cost producer of aluminium plus large value addition through Novelis Fusion Technology)
· Market crash: A quick guide for young investors
~ Sterlite Industries (commodity powerhouse at a time when globally commodities are in a super cycle)
~ Sesa Goa [Get Quote] (largest reserves of iron ore in private sector)
I am including many stocks in this sector since global commodities will be on the upswing for the next 5 years.
Telecom
~ RCom (marketing aggressiveness plus financial engineering plus political acumen)
Auto
~ Tata Motors [Get Quote] (from world's cheapest car to luxury Jaguar to SUV Landrover to trucks -- will be in global top five in 5 years)
Finance
~ ICICI Bank [Get Quote] (proactive, aggressive fund raising and lending taking full advantage of slow decision making at PSU banks)
· Making money vs creating wealth in stocks
~ Reliance Capital [Get Quote] (straddling all areas of non-banking financial services)
Infrastructure
~ L&T (another evergreen company -- value unlocking through listing of subsidiaries, very strong core business)
~ Patel Engineering [Get Quote] (strong position in high margin high technology construction sector, real estate development)
Pharma
~ Glenmark [Get Quote] (innovator, outlicensor of drugs in fast growing therapeutic areas like lifestyle diseases)
~ Cipla (innovator copier -- low cost supplier of essential medicines people can't do without)
Realty
~ DLF (proxy for the Indian real estate sector)
~ Unitech (number 2 and tries harder than number 1)
~ Sobha Developers [Get Quote] (fully integrated real estate contractor who graduated to property developer status)
Value picks from current market
· Stocks that saw least correction
· Stocks for long-term investments in 2008
· Damani's advice to investors
· Stocks to pick - Tata steel, TCS, Petronet LNG
· List of the BSE-100 stocks losing most from their ...
· Lessons from January 2008
· Zen Technologies:-The scrip to watch out for in th...
· Find value picks from the day's biggest losers
