Which stock you should buy for your portfolio?

June 13, 2012   ·   0 Comments


When analysts are recommending a Sell on Reliance, we believe this is one of the best times to invest in India’s second largest company – Reliance Industries. Here is why?


Why you should have a contrary view than street?

  • Track Record: Reliance has a unique track record of and value generation for last 34 years. An investment of Rs 10,000 in IPO has grown to Rs 77.8 lakh today
  • Stocks has given 28% return year on year since inception.
  • Stock has given 12 times returned on investment in last 7 years.
  • Stock is at multiple 3 years low and is at on very attractive valuation when talked in terms of P/E.
  • Reliable Management: Mukesh ambani has grown the company from 2 billion $ company to 42 Billion $ company in 10 years when he took over in 2002 from Dhirubhai Ambani as managing director.

Reason why Reliance is must have in Portfolio:

  • Cash pile: Reliance will invest Rs 1 lakh crore in the next five years. The company generates up to $1 billion in free cash every quarter and held $13.8 billion at March-end.

Ask any businessman – What is the most essential thing is required for successful money. The response will be Capital which the company has plenty in hand. Once in multiple projects which Mukesh ambani talked in his 38th conference meeting, will mean that will not have to take money on loan and pay rates to banks.

Stocks such as Airtel, and many more bluechip stocks have hefty burden on the books.

  • RIL will offer specialised content in key like education, healthcare, security, entertainment, financial services, and government-.
  • production currently at 30 billions of equivalent will grow ten times in five years.
  • Digital: commercial rollout plans are being finalised.

, why Analysts are recommending a Sell:

  • Most of the analysts are shocked to see low production of gas at KG D6 Basin.

We believe that there is no problem as far as gas is discovered. Due to low selling price of natural gas in International markets, company doesn’t want to sell gas at such low price. The moment natural gas hits good price in commodity market, we will all be amazed how much gas company is able to take out from the basins.

The simplest rule in market which is hardest to implement – Buy Low, Sell High. People should be greedy to buy when they frightened that how much more correction can come in a stock and vice verse sell when every one wants to buy.

Rules for investing talks about reliable management, good track record, good future prospects and attractive valuations which company possess at this point of time. At this point in time, this should be first stock which one should grab if one wants to start building his portfolio.

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Rajesh Singla

Rajesh is the founder & CEO of Stockssavvy, Stocks analyst,financial advisor by choice,software engineer by fate,biker,gamer,cricket lover n enthusiastic person. He believes in doing things not just to get by but to get Ahead...

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