Value buying emerges when the overall sentiment is weak!
Fundamentals of stocks are often overlooked when the market mood is buoyant with all and sundry rising well above what their fundamentals warrant. On the contrary, when the markets are reeling under pressure from negative sentiment, FII disinterest and rising interests, the fundamentals play a significantly important role.
After the mayhem of midcap stocks in first seven months of 2013, time was just ripe for fundamentally strong stocks. Vivekam always stood behind analysis that considers and values operational performance as the foremost driver of stock prices. In our study involving 12 years statistics, we did notice that 87% of stocks showed connection between improved performance and higher stock prices.
In the current year too, when we compared the performance of stocks identified as top stocks (SPOTS) on August 1st 2013, a full one month after the June quarter ended and by when reasonably large number of companies announced results, we are overwhelmed to see all 10 stocks appreciate several times more than index. While the skeptics may attribute this to coincidence, our conviction is further fortified.
SPOTS compares the stocks identified as undervalued (and growing too) on the date of your choice and the prices they fetched in next three months, if three months have passed by. Else, it compares prices till the latest trading day. Since August 1 was not older by 3 months, prices upto September 20 were reckoned for study.
Visiting our website www.vivekam.co.in you will also realise that the same analysis could have helped you realise some spectacular gains by merely following the SPOTS area (SPOTS-Current for the latest choices). Gone are the days where you will have the names of a few stocks being chanted by advisors. Here comes the selection based on merit and that merit included opeartional performance as well as market inputs through statistical tools.