2017 witnessed a strong momentum throughout all mid cap and small cap counters and multiplied investors money to many fold. Now, in 2018 some Investors might be expecting a similar kind of show off in all good counters which already rose to multi year high levels and some are betting on the counters which missed the last year’s rally to play a catch up game. it means Investors are expecting a stock specific show rather than a overall northward trend.
While Nifty has already on its higest level and on brink of touching 11100 and BSE Sensex is also at its all time high, the question which we need to ask here is whether we should look towards Mid cap and small cap segment or we should limit ourselves to Large cap counters only. Everbody knows that there a little more risk involved in the small and mid cap counters in comparison to Large cap stocks which are more clear by Corporate governance prospective and also future identifiable due to large market reach, but the overall formula remains same ‘high risk high return low risk low return’ . It depends on the Risk appetite of the investors where he wants to go and how much money he can play with.
The good part of current scenario is even large cap stocks are giving excellent return and promissing a better one for future.Many medium and small cap stocks have already become large cap and many more of the stock are in the process of doing so. Our aim should be to identify those stocks which are having less market capitalisation but have the potential to become big and clear fundamentals, business outlook, market demand for backed by the excellent management and transparent corporate governance model. Here are some companies which are all set to enter into the elite class based on the above criterion:
(1) Dewan Hounsing Finance Corporation (DHFL)(current market price : 595: Market cap 18000 crore)
Being a Housing Finance NBFC it has over 70% of its customer base comprises of individuals from salaried class with stable source of income which reduces the risk of NPA and enable the Company to maintain good profit margins. Apart from this, company has been seriously taking all measures to keep the NPA level below hurting point. Based on strong year of performance ahead, company has a potential to deliver big returns in future.
(2) Delta Corp (stock price 373: Market cap 9,981.12 crore) – suggested at 264 levels 3 months ago on my youtube channel.
Considering the area of niche business and being only listed company in this particular area future for this company looks very bright and further strength is given by the Goa new casino policy and commencement of Sikkim airport. This would definately increase the visitors numbers and further, many other states may opt to have this business in their state and change ask for the change in legislation in this regard. It has a long way to go and all potential to become big in the industry.
Watch my Youtube video for detailed analysis at: https://www.youtube.com/watch?v=xqfQ8l-Si30
(3) Multi commodity exchange of India Ltd. (Current Price 822: Market cap 4100 crore)
Currently trading at 52 week low this stock has good potential to become huge in future. This stock is having low equity and and good profit margins. It was only the result of last quarter which brings this stock to its 52 week low but it may turn out to be a buying opportunity to investors as there was no such disappointing thing happened in this company and its only the matter of time that it come back strongly. It is only exchange where all commodity trades and therefore has its own area of niche business which has good potential also.
(4) Yes Bank (current price 361: Market cap 83000 crore)
Though market cap of Yes Bank is 83K crore but while comparing with even a mid size banks the market reach of this company it still very less. If you will compare it with Kotak Mahindra Bank also its not even half of it. I am expecting that in long run stock will continue to play a catch up game and soon will attain a market cap of more than 120,000 crore.
(5) All cargo Logistics Ltd. (current price 198: Market Cap – 4000 crore) (suggested 1 month back on 212 on my youtube channel)
Based on the strong logistics services portfolio and huge corporate action in this counter company is in hurry of becoming the market lead in this space. Some acquisition of foreign companies are successfully executed by this corporate and big capex is underway of being applied. Keep this counter in to track list.
Watch my Youtube video for detailed analysis at : https://www.youtube.com/watch?v=auL_3gpvcDU