Motilal Oswal's top 5 mid and small cap picks can deliver 10-15% in three months1 min read . Updated: 14 Sep 2020, 03:01 PM IST
These high conviction stock ideas are expected to do well in one to three months period.
Sebi’s recent circular tweaking asset allocation framework for multi cap equity mutual funds has fired up small cap stocks. The Nifty Small-Cap 100 index soared 5.2% in trade on Monday. Nifty Midcap 100 index is up by over 2%. Market analysts are expecting huge buying in mid and small cap space by mutual fund houses amid Sebi's announcement of new portfolio allocation rules which require multi cap funds to invest a minimum of 25% of their portfolio each in large cap stocks, mid caps and small cap companies. Traders and short term direct stock investors will not let go of this opportunity to make gains while there is a buzz. Motilal Oswal Financial Services has listed 5 high conviction mid cap and small cap ideas which it expects to do well in the short to medium term.
"The stocks are fundamentally sound with good growth potential. One can buy this basket of 5 stocks with a potential upside of 10-15% over a time frame of 1-3 months and keep a stoploss of 7-8% on the overall basket," says the Report.
The mid cap recommendations include ABFRL, JK Cements, Tata Power, Ashok Leyland and Dr. Lal Pathlabs.
Their small cap stock recommendations include Birla Corp, IEX, Team Lease, Essel Propack and KEI Industries. There can be a potential upside of 10 to 15% over one to three months. Investors should keep a stop loss of 7 to 8% on the overall basket.
Multi cap funds constitute over 19% of the total actively managed equity mutual funds AUM. It is the biggest category with large cap schemes also having a similar share in the total equity AUM.
Emkay Financial Services has also listed their top mid and small cap stock recommendations for portfolio managers.