The Sensex has risen only 1.6% in the past two years, but several mutual fund schemes have delivered good returns during the same period. How did they do it? “While the major indices have some slow moving sectors and stocks in them, some select pockets are doing well. It is only a stock-specific strategy that was working for the last two years and it may continue in the coming years as well,” says Pankaj Pandey, Head of Research, ICICI Direct.
Most of the outperformers are from the mid-cap segment. At the same time, several mid-cap stocks have taken a hit in the recent past. Experts see this as an opportunity for investors. “Since there has been a good correction, this is the time to get into quality mid-cap companies with earnings visibility for the next 2-3 years,” says Kunj Bansal, ED and CIO, Centrum Capital. This week’s cover story digs deep to find quality midcap stocks for you. These stocks are tracked by analysts but are but are not very well known to the general investor.
METHODOLOGY First, we removed all companies with a market capitalisation of more than Rs 6,800 crore—one billion dollars. Out of this list, we dropped scrips that are tracked by less than 10 analysts. The third step was to select stocks with the highest analyst recommendations. The final list was drafted based on our interactions with the experts. To avoid companies known to you, we removed the scrips featured in the ‘Pick of the week’ section in the past two years. To get a diversified list of stocks, we also avoided selecting two stocks from the same sector. In the end, we have shortlisted eight hidden gems that are worth investing in right now. Do keep in mind that direct investments in stocks requires a long-term perspective. Happy investing.
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