Companies to look for while picking the best stocks under Rs 100
Stocks move due to activities of two sets of participants in capital markets: traders and investors. While traders are also essentially investors, they are typically short-term momentum investors. In fact, some traders invest for as short a time period as a few minutes or a few hours within a single trading session or day.
A stock could be a trader’s favourite because of price volatility providing an opportunity to take advantage of sharp ups and downs, but it could also offer a meaningful opportunity to long-term investors to put some of their money.
However, one filter that some long-term investors use to decide on new stock picks is where the delivery ratio of stocks is high.
The delivery ratio represents the proportion of shares that have changed hands for good and not just for intra-day trading. Stocks with high delivery means that people took positions in those stocks at least for a few days or possibly even for months or years.
We scanned through the data to pick stocks with higher delivery ratios over the last trading day compared to the monthly average.
If we apply a filter of stocks with market price under Rs 100 a share, we get a set of companies that are seeing an uptick in terms of possibly more long-term investors and offer a lower entry point and therefore become more attractive.
Large and mid-caps
Notably, a lower market price does not necessarily mean a pool of only penny stocks or small cap names.
In fact, we have two large caps in the basket exhibiting an uptick in terms of delivery percentage. These are L&T Finance Holdings and Union Bank of India.
If we move a step down in the mid-cap space with a market value in the Rs 5,000-20,000 crore, we have names like Easy Trip Planners (parent of online travel agency EaseMyTrip), TV18 Broadcast, Shree Renuka Sugars, HUDCO and HFCL.
Small and micro caps
The list has several smaller firms with market value under Rs 5,000 crore that fit the criteria and if we start with names from the top of the list in terms of market value, we have Paisalo Digital, IFCI, Jaiprakash Associates, Sequent Scientific, Subex, Time Technoplast, Filatex India, Rama Steel Tubes, Kesoram Industries, Dwarikesh Sugar, Precision Wires, Andrew Yule, Oriental Hotels, Shree Digvijay Cements, Everest Kanto and OnMobile Global. These stocks command a market value over Rs 1,000 crore.
Looking still lower, we have Himatsingka Seide, Toyam Sports, Nectar Lifesciences, Prozone Intu and GVK Power & Infra among stocks with market cap in the Rs 400-1000 crore or at last $50 million.
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