Which are the best value investing stocks in India?

POSTED BY Ram ON September 25, 2010 11:45 pm COMMENTS (4)

Based on Buffet/Graham principles (Good management, small/mid cap, steadily increasing dividends, earnings growth, non-cyclicals, etc.), could you all discuss what stocks you think are the best value stocks?

4 replies on this article “Which are the best value investing stocks in India?”

  1. Ram says:

    Jagadees,

    Thanks for your inputs. Great info, and nice link.

    Good point about Castrol. I was just overlooking the already existing 2-wheeler segement (overlooking the obvious) :).

    Regards,
    Ram.

  2. Jagadees says:

    @Ram
    He invested mainly in large caps but during adverse conditions either when market is under extreme fear(e.g. investment in coca-cola) or company going through rough patches (e.g. investment in washington post). Most of his stocks are of mundane non-cyclical business like Gillette, companies selling furnitures, candies, reclining chairs etc.

    Yeah ITC is very good company. (But personally i wont invest in companies selling cigarrettes and liquor). that is the reason i have not mentioned.

    In FMCG – Dabur india and Marico are also good company with some competitive advantage.
    sure auto stocks are cyclical. but in my view point it will provide opportunity to enter the stocks. But in case of castrol i wont agree as cyclical because as long as bikes are running you need lubricants.

    you can visit this site for the buffett-like indian stocks – http://www.valueresearchonline.com/story/h2_storyview.asp?str=14853

    Happy investing 🙂

  3. Jagadees says:

    FMCG and pharma companies are generally defensive and will show steady increase in dividends, earnings growth and non-cyclicals. Following companies also has some kind of moats/competitive advantage over rivals. My choice are
    1. Asian paints
    2. castrol india
    3. colgate-palmolive
    4. Nestle
    5. GSK consumer healthcare
    6. Procter and gamble hygiene and healthcare
    7. GSK pharma
    8. Aventis pharma

    Besides FMCG and pharma, auto stocks like hero honda and bajaj auto are also good bets.

    Above said that according to buffett/graham, identifying good companies is one part. equally important part is the price at which you are buying the stocks which determines your returns. so its always advisable to have good margin of safety for the stocks you are investing.
    One thing – i dont think buffett ever advised/invested in small/mid cap stocks.

    Happy investing 🙂

    1. Ram says:

      “One thing – i dont think buffett ever advised/invested in small/mid cap stocks.”

      I was under the impression that Buffet would always be after stocks that are undiscovered and hidden. Mostly, the large caps would be ones that are surely discovered.

      Thanks for sharing the stocks you believe are good, and totally agreed on the price front. Once the markets crash, we can hope that a lot of stocks will be available at better prices.

      Some that I feel are good (beyond your list) are –
      1. ITC
      2. Dabur

      What do you think of these?

      Auto stocks would be cyclical, right. So they will fall a lot and even rise a lot. Castrol too would be dependent on a cyclical industry and so that too could be called cyclical, right?

      Regards,
      Ram.

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