stocks

Entering a stock at peak valuation? – 5 questions to ask

When markets make merry, many stocks have seemingly compelling stories even for entering at peak valuation. And the market is fine with stretched valuations to accommodate such stories. In other words, every market-favoured stock appears to scream – buy me at any price.

But when challenges emerge, the same market starts reacting so sharply that investors who bought into the story midway start making losses. Yes, there isn’t a bigger disaster for stock market investors than earnings and PE multiples contracting together.

Entering a stock at peak valuation? – 5 questions to ask Read More »

Why banking is a fragile business

The recent furore surrounding the failure of Silicon Valley Bank in the US has exposed that while banking is a favourite sector with stock market investors, the fragility of the banking business is far from well-understood. Banks are held up as the engines of economic growth. Whichever sector grows, the banking sector ultimately gains. Banks are also accorded a higher valuation than most sectors during bull phases. In good times, banks made up a 40% plus weight in our leading stock market indices.

Why banking is a fragile business Read More »

Prime Stock: An averaging call on this fashion player

In February last year, we had issued a buy call on the stock of a premier fashion player housing a vast number of national brands. The steps this company had taken to expand its offering range, a return of focus on margins, and the consumption promise all propelled the call. the stock rallied handsomely as well, post our call.
However, owing to two factors, the stock has since given up nearly 40% from its high and is currently about 25% below our original call price.

Prime Stock: An averaging call on this fashion player Read More »

Technical outlook: Can the Nifty 50 slide further?

In the past couple of posts on the Nifty 50 outlook, we have been voicing a bearish view for the Nifty 50 index. This has played out as per expectations. The index almost achieved the first target of 17,150-17,200 that was mentioned a couple of posts ago. In the previous update, we had mentioned the possibility of a slide to the 16,700-16,900 zone.
Let us assess if this target is likely to be achieved or not.

Technical outlook: Can the Nifty 50 slide further? Read More »

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