Check out mid, large caps with high delivery ratio as long-term investors pull up weight

by 5paisa Research Team Last Updated: Dec 11, 2022 - 01:12 pm 49.9k Views
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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 past week compared to the monthly average.

The exercise sprung out names of as many as 16 large cap stocks. These are ITC, Grasim, Zomato, L&T Infotech, Indus Towers, Godrej Properties, United Spirits, Jubilant Foodworks, HAL, United Breweries, Biocon, Concor, Ipca Labs, Zee Entertainment, Oil India and Happiest Minds.

IT firm Happiest Minds was an outlier with 100% delivery ratio as against the monthly average of around 62%. This shows the stock is now fairly on the long-term investors’ radar and punter activity in the counter is negligible.

Aditya Vikram Birla flagship Grasim is not too far behind with the delivery ratio crossing the 80% mark from 60%.

Among other large cap stocks, only ITC and Zomato saw delivery of about 50% or more after rising from the previous monthly average.

Mid-cap picks with long-term investors

It’s not just the large caps where some counters have seen an increase in delivery ratios. We also checked mid-cap stocks (current market capitalisation in the Rs 5,000-20,000 crore range) that have seen a visible change in delivery ratios above the 50% mark. In this list, we have companies like Alembic, Zydus, Godrej Agrovet, IIFL Finance, EPL, Jindal Stainless, Orient Electric, Vijaya Diagnostic and Great Eastern Shipping.

Other mid-cap stocks that also saw a rise in the delivery ratio include Polyplex, Chalet Hotels, Gujarat Alkalies, EaseMyTrip parent, Caplin Point, IRB Infrastructure, Tata Investment Corp, Blue Star, Sun Pharma Advanced Research, Rain Industries, NBCC, Mahindra CIE, Welspun India, UCO Bank and Brigade Enterprises.

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