Stocks to Look Out For
Business Today|September 20, 2020
VALUE INVESTING IS ALL ABOUT PICKING GOOD QUALITY STOCKS TRADING AT A DISCOUNT TO HISTORICAL VALUATIONS. BT CRUNCHES THE NUMBERS TO BRING YOU LIKELY FUTURE WEALTH GENERATORS
RASHMI PRATAP
Stocks to Look Out For

Investing is a unique kind of casino — one where you cannot lose in the end, so long as you play only by the rules that put the odds squarely in your favour.” When British-born American economist and investor Benjamin Graham, who was also Warren Buffett’s mentor, said this sometime early in the last century, he was guiding investors on ways to earn good returns while playing it safe. This is truer now than ever before in India where, in a volatile stock market, only a handful of stocks are driving the rally, while most others are refusing to move.

Graham was a proponent of value investing, the most reliable way to generate good returns in stocks markets. The idea is to pick good quality stocks trading at a discount to their historical valuation ratios. These, he believed, would be long-term wealth creators while also providing a margin of safety. With the current stock market rally built on weak economic fundamentals, it is even more important for investors to buy only value stocks with strong growth potential.

To save you the hard work, BT has crunched numbers to come up with scores of such potential wealth generators. We have drawn up the list (See Table) by comparing the current valuation ratios of the top 1,000 listed companies with their historical ratios and looking at the quality of their earnings and balance sheet strength (See Methodology).

Ideal Time for Value Picks

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