I hold 675 shares of Ashapura Minechem Ltd at an average cost price of Rs185.51. Its current market price is Rs26.25. I am willing to stay invested for three years. Also, do you think I should buy more shares of the same company to bring down my average cost price on it, or am I better off just holding the stock and investing in other companies such as Larsen and Toubro Ltd (L&T) and State Bank of India/HDFC Bank Ltd, which seems to be no-brainer picks to me given the amount of time I am willing to stay invested? Also, I would like to know the valuation levels of these scrips currently.
Ashapura Minechem is showing no signs of a let-up despite a massive fallin the last few months. The scrip has still not bottomed out so I would not recommend buying more of this stock. However, for the time frame mentioned by you, there are several very attractively prices stocks, which might offer you very good returns.
Among frontliners, Reliance Capital Ltd, Reliance Petroleum Ltd, NTPC Ltd, Tata Power Co. Ltd, Bharat Heavy Electricals Ltd, L&T, Reliance Industries Ltd, Axis Bank Ltd, ICICI Bank Ltd, HDFC Bank, Kotak Mahindra Bank Ltd, etc., very attractive. However, among small stocks, Mcleod Russell India Ltd, Firstsource Solutions Ltd, Development Credit Bank Ltd, Yes Bank Ltd and Zuari Industries Ltd are very attractively priced.
I have 200 stocks of State Bank of India bought at Rs1,470. Should I hold or sell them? I am ready to hold them for up to two years.
State Bank of India would be among the first stock to bounce back when the momentum on the bourses turns positive.
So I would advise you to hold this stock and pick up more stocks in small lots on declines to average out your acquisition cost. I hope in next two years you would get decent return.
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