Investment ideas

From time to time, I have been recommending scrips for investment. My perspective is a hold of 12 to 18 months for decent return. I am looking for wealth creation. While there are large numbers of good companies in the market, we need to be interested when they are priced attractive, have a potential for at least 30% growth in a year, and their downside should be within 10 to 12% from CMP.

While none of us can assure the perfect risk-reward ratio, in the underlying business, there needs to be a sustainable income model; reasonably assured earnings visibility; EPS needs to grow year on year (preferably every quarter); sturdy profit margins; and if possible, high entry barriers.

While we can keep expanding our wish list and seek better corporate governance, improving market share, core values, and several other attributes, I believe the performance results would translate the business performance, and ground realities in the long run.

After examining a large number of scrips, from both fundamental and technical levels, I find the following attractive for investment:

1. BHEL

2. Hind Zinc

3. ICICI Bank

4. Mahindra & Mahindra

5. ONGC

6. Reliance Industries

7. Tech Mahindra

8. Allsec Technologies

9. Maharashtra Seamless

10. Neuland Laboratories.

These are not for traders or short term plays. Do not watch the moves or volatility on a week to week basis, but watch them on month to month or quarter to quarter levels.

There are other good scrips such as Bharti or SBI or L&T or Siemens which meet every requirement except price. They have run up, and would become a compelling buy if & when they are cheaper.

A few sectors such banks, ball bearings, cement etc are attractive, but valuation needs to be in our favor. I wish to see the risk-reward ratio in our favor, before I prefer to buy.

Some sectors such as sugar, textiles etc are going through pains, and I believe the worst is not over for them.

The list suggested above would be updated from time to time, and I suggest you to examine their fundamentals, price trends and market sentiments before you rush to place the buy order. Be convinced that it is a bargain, and in your time scale.