Which are the undervalued stocks that you should go for?
ShareSansar, June 17:
Fuelled by the BFI stocks, the market is surging like anything over the past few days. There is a scope to make a lot of money in the market both in long-term as well as short-term positions -- if we can be prudent.
To help you get the right scrip, ShareSansar has asked the experts from the sector to pick those stocks which they consider undervalued. Check them out:
Irrespective of which particular scrip to go for, all the experts agree that the banking stocks are the one to go for at this point, if we are to make quick money in the short-term as well as in longer run.
They are also unanimous that the ideal time to buy non-banking shares will be after a month, especially after the end of the current fiscal year 2070/71.
One of the noted share investors, Dipendra Agrawal says that Nepal Bank Limited and Agricultural Development Bank Limited are the best undervalued scrips to pick at this point for the long term.
“A lot of NBL staff are retiring within a year, which will eventually add to the net profit of this asset-based bank,” he explains. “ADBL is good as it is bringing in foreign strategic partner, besides making good income over the recent months.”
All in all, he adds that the banking shares will continue to a new high this fiscal year, and the development bank and finance companies will follow the market leader till the bull ends.
“Hence any of the commercial banks are good at this juncture,” he further says. “But if you are looking for the undervalued stocks of one of those big banks, then Nabil Promoter is the one to go.”
On the non-banking front, he believes that Arun Hydropower Company Limited (AHPC), though considered an underdog, is in fact undervalued if we compare it with Chilime, and there is a scope to make some cool money in the longer run.
Jeevan Prasai (Broker number 39) also says that most of the development banks, though many of them are seeking merger or acquisition, could be the stock to clinch in the present context as the price of commercial banks are relatively much higher and rising further.
“I think a good investors would be looking for the development bank whose price is hovering in the periphery of Rs 100 to 200,” says Prasai, adding that the price of such stocks have very thick chances of surging as the commercial banks are now bullish.
Even among the BFI market leaders, he opines that Nepal Investment Bank Limited (NIBL) remains undervalued if you want to buy a good stock now.
One of the very big investors, requesting anonymity, said that an investor who wants high return in the longer should get hold of scrip of Prime Commercial Bank Limited, NMB Bank Limited, Sanima Bank Limited, Citizens Bank International Limited, and Sunrise Bank Limited at this point.
“Prime Commercial Bank Limited, is the most undervalued stock among all the good stocks in the market if you ask me,” he says. “The rest of the banks I have mentioned will also fetch higher return since they are relatively low priced now and are most likely to rise significantly in near future.”
He adds that NIC Asia Bank Limited, Soaltee Hotel, and NIBL also remain undervalued if the prospect of their profitability is anything to go for.
Another leading share investors, Dilip Shrestha believes that the commercial banks below the price of Rs 400 per share are undervalued, and will eventually settle around Rs 500 -- sooner than later.
But he is quick to add that ADBL is the most undervalued scrip among all the stocks in the market, considering its high return and imminent strategic partnership.
He added that though development will also soon follow the surge of the commercial banks, development banks may be risky in that the investors cannot square them off easily, or at the desired price as such scrips are not as liquid as commercial banks.
Sandeep Jalan (Broker 56) says that banking stocks such as Siddhartha Bank Limited, Prime Commercial Bank Limited and ADBL are the stocks that remain undervalued despite high returns.
Kailash Bikas Bank Limited, Garima Bikas Bank Limited and Ace Development Bank are among the stocks among the development banks, which will give good returns in the short term even if they are bought today.
He believes that the investors can also go for Oriental Hotel Limited, which has wrote back almost all its debts, and Soaltee Hotel, the asset-based company doing good profit, as they are very likely to grow significantly in the coming days.
