Trendlyne Blog: The Baseline, Latest on stock market and finance in India and the world.

15 Mar 2019

HSBC, analysts predict bull market, EPS growth of 24%

HSBC and Morgan Stanley are of the opinion that Indian markets are poised for a bull run, predicting a consensus earnings per share growth of 24% in 2019. Morgan Stanley is expecting the Sensex to scale up to 42,000 levels in 2019, with a bullish scenario of 47,000 and bearish scenario of 33,000. HSBC's target for end 2019 is 40,300.

With the Sensex and Nifty both rising and stocks in key sectors including banking and consumer markets hitting record highs, HSBC AsiaPac said that Indian markets are heading towards a bull run, with consensus earnings per share (EPS) likely to rise by 24% in 2019 YoY.

"The macro backdrop is looking better in 2019 than in 2018. Inflation is low, and our economists are now looking for a rate cut in April. We expect overall GDP (gross domestic product) growth to accelerate," Herald van der Linde, head of equity strategy for Asia Pacific wrote. "The Indian market is underweighted in Asia

The Baseline

12 Mar 2019

Two stocks in the DVM Select Long-Term Strategy hit record highs today

The DVM Select Strategy available to subscribers is a DVM+Advisor strategy that chooses stocks for long-term holds. It removes stocks no faster than once a month. This strategy looks at both DVM scores and recommendations from our in-house SEBI advisors. The most recent exit from the strategy, Sadbhav Engineering, exited in March 2019 with a 10% gain.

Two stocks in the DVM Select hit record highs today, indicating that in a bullish market, this strategy tries to maximize returns and in a bearish market, it doesn't over-cycle the portfolio. The win-loss ratio for the stocks in this strategy is strong - as seen in the screenshot, L&T, Aarti Industries, TTK Prestige and others entered this strategy at competitive share prices.

The Baseline

11 Mar 2019

Screeners: Big deal buys in shares the past week

Over the past week, 34 stocks saw big purchases in shares (above 1% of total shares) by promoters and other insiders. This stock screener keeps track of these companies where purchases have been made via insider and SAST trades. Over the last week, these included NBFC firm Satin Creditcare, Sadbhav Engineering, and others.

The Baseline

07 Mar 2019

Screener: Akzo Nobel, Oberoi Realty see Golden Crosses as share prices rise

The dedicated stock screener tracking golden crosses (in this case SMA50 over 200, but configurable) has seen a burst of activity in recent days, as share prices rose and the markets turned up. Among the stocks seeing multiple golden crosses this month, are included Akzo Nobel, Oberoi Realty and Kalpatru Power.

15 stocks have seen 50/200 golden crosses since the beginning of the month, while 17 stocks including DCM Shriram and Jubilant Life Sciences achieved the SMA30/200 golden crosses.

The Baseline

04 Mar 2019

Global markets up on optimism on US-China trade deal

While Indian markets are closed today, global markets, particularly the Chinese and US markets are up on optimism that the US and China are close to a trade deal. The US has reportedly agreed to waive at least $200 billion of the $250 billion in tariffs that it has imposed on China, with China in turn agreeing to improve access to its domestic markets, particularly for agricultural products.

However, it doesn't look like neither side has yet acheived what it would have liked, with the access that US wanted to China markets, and changes in intellectual property rules, still sticking points. China wants all the recent tariffs imposed by the US waived, rather than a partial removal. Trade representatives said conversations are ongoing, as the deal nears completion.

The Baseline created a screener trial

01 Mar 2019

trial

This screener selects stocks with strong financial durability, reasonable valuation and momentum. To get notified of changes to the screener, set an alert.

The Baseline

01 Mar 2019

Three pharma companies in top ten firms with highest FII/FPI stake increases

While the stock markets saw significant volatility in the last few months, with FII outflows and jittery domestic participation, some companies saw Foreign Institutional Investors and portfolio companies ramp up their stake significantly. This shareholding screener identifies companies with the highest FII/FPI stake increases.

Jain Irrigation and Bliss GVS Pharma top the list, with foreign stake increases of 31.5% and 8% QoQ respectively. Bharat Financial Inclusion and JustDial also feature, as do two other pharma companies.

The Baseline

28 Feb 2019

Screener: Screening companies using the Piotroski Score

The Piotroski Score screener is one of our most popular free screeners on Trendlyne. The Score is a number between 0-9, which is used to assess the strength and quality of a company's finances. It is used investors in order to find the best value stocks (nine being the best, zero being the worst). The score looks at a company's profitability numbers and its long term debt, its liquidity, its operating performance as per its gross margins and asset turnover.

The backtest returns show the score performing reasonably well when used to identify stocks with scores above 7. Escorts Limited, Jindal Saw and 53 other stocks show up in this screener.

The Baseline

28 Feb 2019

Valuation Gap: Nifty Midcaps are getting slaughtered, despite strong results

The Midcap story was on the downtrend since mid 2018, and market watchers have been waiting for a recovery. The first months of 2019 however, has seen midcaps continue to be volatile, as pre-election jitters, US-China and now India-Pakistan tensions impact this segment further.

The PE charts provide at a glance, how Nifty50 midcaps have taken a significant hit compared to the Nifty50 and Nifty500 PE numbers. This suggests that midcaps are available now at affordable valuations - however it is hardest for investors to know where the bottom is, and if they are genuinely getting a stock at bargain price. One interesting indicator here is the earnings per share (EPS) of Nifty Midcap50, which has jumped in the past three months, compared to the EPS of the Nifty500. So while the PE of the Nifty Midcap50 has fallen, the EPS has jumped, moving in opposite directions and good news for investors looking to buy.

EPS of Nifty 500 closely tracks the PE

The Earnings Per Share for Nifty500 stocks has actually fallen in the last three months, while the PE of the same universe has risen slightly. In contrast, the Nifty50 Midcap PE and EPS has moved in opposite directions with EPS showing strong improvements.

Is the decline story over for midcaps? Markets function on sentiment in the short-term, but the numbers at least, are positive for this universe.

The Baseline

25 Feb 2019

Nifty Call: Nifty Futures at 10887

With domestic markets as well as global indices higher on optimism on China growth, Nifty50 futures hit 10887.1 today, indicating some return towards a positive outlook. NiftyBank futures were up to 27162.