5 Best Shares To Buy Today For Short Term

5 Best shares to buy for short term in Sep 2018

The general rule of thumb is that shares bought for less than one-year holding duration are considered as short-term shares. Here are the 5 best shares to buy today for short term duration of around six months. These top shares can be a bought now, today, tomorrow, or any other day as long as they are around the price recommended. If your time horizon is long term i.e. more than a year then visit best shares to for buy long term.

Disclaimer: Shares recommended and opinions below are for informational purposes and shouldn't be taken as a final advice from Niveza India. You shouldn't rely on this free advice solely and do your own research to arrive at the final conclusions. Our final opinion on which shares to buy for short-term investments is sent via SMS and Email to subscribers of Our Premium Products.

Shares To Buy For Short-Term

Sonata Software Ltd. (NSE:SONATASOFT) (Share Price: Rs.310): Potential Buy

Valuation: Undervalued with TTM PE of 14.61x

Reasons to consider: Company posted revenue growth of ~13% for last five years. It has improved DE to 0.02x in FY18. Cash flow per share stood at Rs 28.63/share in FY18. In Q2FY19, IT service revenues in constant currency grew 4.0% QoQ, dollar revenues increased 3.4% QoQ, better growth & addition of two new clients fuels Europe revenue growth by 7% QoQ.

Drivers: Improving growth in IT services and strong pipeline to boost revenues. Companys digital revenues to gain traction over the coming years led by its platformisation and alliance led strategy. Also, the company has strong deal pipeline and has won USD 1.5 million new deals in H1FY19.

Financial: In Q2FY18, revenue grew by 38.9% YoY to Rs 593.1 crores. EBITDA grew by 35.2% YoY to Rs 74 crores. PAT grew by 37.1% to Rs 62.2 crores.

Jubilant Life Sciences (NSE: JUBILANT) (Share Price: Rs.740): Potential Buy

Valuation: Undervalued with TTM PE of 14.63x.

Reasons to consider: The company posted robust numbers in Q2FY19. The pharma segment grew 55% YoY and LSI segment also grew generously at 20%. Overall performance boosted by generic pharma, LSI and the integration of Triad pharmacies. The management expects H2FY19 to be much better in terms of revenue and profitability; led by growth across segments.

Drivers: Better pricing environment in generic segment, re-priced ethanol contracts from govt , commissioning of the new block for acetic anhydride, gaining market share in venoms and radio pharma and new sterile line in CMO augurs well for the company.

Financial: In Q2FY19, revenues were up 38.2% YoY to Rs 2270 crores. EBITDA came in at Rs 454 crores. PAT was at Rs 209 crores, up 67% YoY. EPS stood at Rs 13.5/share.

VIP Industries Ltd. (NSE: VIPIND) (Share Price: Rs.514): Potential Buy

Valuation: Overvalued with TTM PE of 45.68x

Reasons to consider: The Company enjoys more than 50% market share in organised market. VIP Industries manufactures a wide range of hard and soft-sided luggage under brands such as VIP, Skybags, Alfa, Aristocrat, Carlton, and Caprese. The company posted healthy numbers in last five years.

Drivers: Growth in the aviation industry is an important factor that drives the luggage industry's performance. In June, India's domestic passenger traffic grew 18.4 percent YoY and domestic passenger traffic expanded at a CAGR of 13% during FY13-FY17. GST implementation benefits organised players like VIP.

Financial: In FY18, revenue grew by 12.6% to Rs 1410 cores. Operating margin expanded to 14.53%. PAT grew by 49% to Rs 126.75 crores. EPS stood at Rs 8.97/ share.

Nocil (NSE: NOCIL) (Share Price: Rs.163): Potential Buy (10 Steps To Pick The Best Stocks)

Valuation: Undervalued stock with TTM PE of 13.5x.

Reasons to consider: The company reported healthy numbers in H1FY19. Its a cash rich and debt free company. Capex- Rs 170 cr. The company has completed phase I of New Mumbai capex is commissioned and operational. Expansion at Dahej is expected to commission by Q3FY19. Considering high demand, the company has announced capex plan of Rs 255 crores in phase II; which is expected to commission by H1FY20. Expansion is expected to give an Asset Turnover of 2X.

Drivers: The company is in business of rubber chemicals which has application in tyre and rubber product industry. Tyre industry is growing led by growth in auto industry and imposition of anti-dumping duty on radial Tyres.

Financial: In H1FY19, revenue grew by 22% YoY to Rs 540 crores. EBITDA margin expanded by 482 bps YoY to 29.4%. Net profit grew by 42.6% YoY to Rs 104 crores.

Hindustan Unilever Ltd. (NSE: HINDUNILVR) (Share Price: 1677): Potential Buy

Valuation: Overvalued with TTM PE of 63.25x

Reasons to consider: HUL is a big player in FMCG sector and fundamentally strong. Company is offering its employees a range of exposure opportunities, from immersive experiences with other companies to exposure to new-age technologies and work culture, so as to make them future-ready. Companys new initiative will be beneficial to company in long run.

Drivers: Booming rural segment bodes well for the company. The surge in agribusiness and rural sales has been the driving factor of the future growth potential of FMCG businesses in India. Rural contributes 35-40 percent of overall sales value. HUL operates in three segments of Homecare, beauty care, and foods solutions business. Of this, the home care and beauty care products are widely distributed in rural and semi-rural areas too, given the rising youth lifestyle aspirations of rural India.

Financial: The company posted revenue of Rs 35,550 crores in FY18 vs Rs 33,252 crores in FY17. ROCE and ROE stood at 102% and 75% respectively in FY18. Net profit grew by 16.41% to Rs 5227 crores in FY18 and EPS is Rs 24.14/ share.

Uflex (BSE: UFLEX) (Share Price: Rs.286): Potential Buy

Valuation: Undervalued with TTM PE of 7.09x.

Reasons to consider: The company posted healthy numbers in FY18 and H1FY19 as well. High margin Aseptic's margins would benefit company at margin front.

Drivers: Uflexs Aseptic revenues are expected to start from H2FY19. Uflex will be the second player in the segment in India after Tetra Pack. The company expects to garner market share of 23-24%. Capex, continuous innovation and product portfolio expansion poised well for growth.

Financial:In Q2FY19, the company reported revenue of Rs 1204 crores vs Rs 1157 crores in Q2FY18. Operating margin turn out negative owing to high cost. The company posted negative net profit since last three quarters.

How to Find the Best Short-Term Shares?

Whenever you are contemplating stock investment, whether it's for short-term or long-term, you have to do a certain amount of research. There are aspects which ought to be touched upon in order to find a company worth investing. For a long-term view, you have to do an in-depth analysis of the company, its business, corporate governance, etc. However, if you have a short-term view, the process can be cut short considerably.

No Need For A Thorough Sectoral Analysis - In-depth sectoral analysis or the top-down economic analysis is not called for when you are looking for short-term stocks. The screeners are set to find the events which will have an impact on the price of the stock in the near future. These events can be anything like quarter earnings, conducive government's policies, a good order-book, optimistic management commentary for subsequent quarters, etc. These are some of the short-term triggers which have a marked influence on stock prices.

As gaining from short-term stocks needs high precision, it's a domain for experts. That's why its prudent to avail services of an advisory firm.

Niveza offers v360 which give short-term value picks with thorough research and analysis. Not just that, you get timely updates of all the open calls along with precise entry and exit points.

Benefits of Buying Short-Term Shares

Like every other form of investment, short-term investment has its own set of pros and cons. From the quantum of returns to risk and reward equation, there are plenty of points on which short-term investment locks horns with the long-term investment. Let's take a point by point look at the pros and cons of going short.

Instant Gains - In the stock market, a whole lot depends on how you time the market. It's a daunting task to understand the constant mood swings of the market, but if you manage to enter a stock at the right time (when it has bottomed out) then you are in for instant gains. In many cases, a certain stock goes down consistently but once it bottoms out then there is a fair possibility for it to start its northward trend. Those who enter the stock at this level get immediate upside on their investment. Quick gains are one of the most enticing aspects of short-term stocks.

Research On The Merit Of Situation - The biggest stumbling block for doing a long-term investment is that one has to do a thorough research of all the financials of the company. In short-term investment, the analysts don't seek the clarity of too far ahead, their objective is to reap the maximum advantage of the short-term price movements. Such movements happen at the anticipation of good earnings, swelling order book or any substantial good news with respect to the company or corresponding sector. To gain from such movements of the stocks it's important to have perfect entry and exit points, only then one gets the optimum benefit of investing in short-term shares.

Disadvantages of Buying Short-Term Shares

The Palpable Threat Of Market Volatility - As we discussed above, volatility is just another name of stock investment. Short-term investors are amongst the people who stand to lose a lot in the market downturns. Investment in equity on a short-term basis always carries a certain risk. As the market cycles are extremely volatile, it can't be said with certainty that your investment strategy will come through as planned. This stands as one of the biggest disadvantages of short-term investment. In contrast to this, those who invest in the long-term stocks automatically discount the short-term hiccups which every stock goes through in its life cycle. There are some stocks which look very volatile in the short-term, but give excellent returns in long term.

Pay More Brokerage & Taxes -There are few investors who give a serious thought to equity brokerage they pay. They think it's a nominal amount that brokers deduct before delivering the stocks. Brokerage in India is extremely high, to add to it, there are plenty of taxes and cesses which are levied on every trade (buy & sell). Naturally, short-term investors and day traders have to pay more brokerage as they are constantly engaged in the buying-selling process. On the other hand, those who go long, and refrain from constant buying and selling of stocks, save a lot on brokerage, cess and taxes.

Risk Factor - When you are investing in stocks with a certain time frame in mind and target in mind it makes it easy to build your risk-reward profile. It simply means to have the math ready of how much you are willing to lose if you aiming for a certain profit. For example, if you are investing Rs.25,000, you can say if your profit target is 20% upside, to get that, you can bear the downside of 8%. It means your stop-loss would be placed at 8% below the buying price. If the stop-loss hits you can invest the same capital in other stock. This way your capital doesn't get stuck for a long time.

 

ABOUT AUTHOR

Niveza Editorial Desk : We are a team of stock market nerds trying to stay ahead of the herd. We spend our grey cells everyday to a pave a smooth road for our clients in the shaky world of stock market. While tracking the mood swings of the market we bring our clients the most rewarding deals.

LEAVE A COMMENT

RECOMMENDED READING

Markets Expected Remain Range-Bound Ahead

Our Analysis The market witnessed a soft opening to the week and it seemed that it will be yet another dull week as we have seen the market moving in the range-bound over the last four-
Read More>>

Value Picks: 5 Things You Must Do, To Shortlist Them

From Warren Buffett to Rakesh Jhunjhunwala there are many stock investors who have mastered the art of wealth creation. There is a reason why some investors always pick the winners while others suffer heavy losses. What is the trade secret whi
Read More>>

Share Market News: Today’s Nifty & Sensex Updates

Share Market News 21-January-2019
Read More>>

Positive Earnings To Lead Markets In Green Zone

Our Analysis This week market was on the positive side following the global sentiment amid the improvement in US-China trade talk, Markets focus has now shifted to Q3 FY19 results star
Read More>>

Free Share Market Tips Today: Stop & Read Before You Invest In Stocks

Various popular stock market news portals and TV channels discuss trending stocks and provide free share market tips based on technical charts and often without in-depth research. Our research desk analyses these trending stock market tips and pro
Read More>>