Many investors who haven’t seen the 2008-9 GFC crisis are thinking is the current CORONA virus crisis more severe than the previous one? Is it good time to do some bottom fishing in stock markets?
I did an academic exercise to understand how some of India’s most consistent wealth creators are faring vis a vis 2008-09. First I headed to wealth creation studies done by Motilal Oswal to shortlist India’s most consistent stock market wealth creators. Here is a snapshot from report below
Of the above list, I picked top 10 in terms of number of times they appeared in wealth creation studies in the last 5 years and then segregated them in financial services and non-financial services category as below
Non Financials
Bosch
Shree Cements
Cummins
Dabur
Titan
Sunpharma
Asian Paints
Financials
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Axis
Kotak
HDFC
Next using Screener.in captured financial information for all of the above companies to derive their 2008-9 PE and PB (For Financial Services business) this will help to run a comparison with their current valuations
Here are the results
Many of the consistent compounders are way off their 2008-09 valuations (still richly valued). The financial services are better-priced vis a vis non-financial services company
The google sheet where this information is collated is available here
I will be updating this sheet frequently to make is more automatic as far too many numbers are currently manually derived
Personally, if I am adding any of the above companies to the scorecard, there will be email updates to premium subscribers
So, what is the conclusion.
Does it mean that the three cases where there is a marginal fall in market cap over the ten year period, namely, Bosch, Axis and HDFC Bank, are good candidates for future re-rating and superb performance in the sense that these companies had not participated in the rally and are stuck where they were even ten years back. All others have been prolific performers in terms of market cap.
Yes Kamal conclusion is that for HDFC, Axis, Bosch we should go back to the drawing board and if things make sense take a position.
Hi Admin,
Thanks for sharing the information, I want to know about the meaning of research and wait under Indicator.
hi,
That’s an internal column for me to
1. Wait for correction
2. Do more research on company to see if a position can be taken
Regards,
Vivek