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

Ashoka Buildcon (NSE: ASHOKA) (Share Price: Rs.122.8):Potential Buy

Valuation: Attractive with TTM P/E 10.70x

Reasons to consider: The companys current order book for the September quarter ended stood at Rs. 9763.7 crore which gives strong revenue visibility for the next three years. Further, robust bidding pipeline worth almost Rs. 35000 crore in the second half of FY19 gives confidence to the companys management to win orders worth around Rs. 4000-4500 crore in FY19E.

Drivers: Ashoka Buildcon is looking to transfer ACL stake to an InvIT. This stake sale through InvIT can help the company to utilise the proceeds to fund HAM projects.

Financial: On financial front, standalone revenue for the third quarter of FY19 came in at Rs. 1065.12 crore as against Rs. 658.92 crore for same period last year, registering 61.6% yoy increase. This was primarily driven by volume growth across the board. EBITDA for the quarter rose by 99.6% yoy to Rs. 148.83 crore from Rs. 74.57 crore with a corresponding margin expansion of 266 bps. EBITDA margin for the quarter stood at 14%. The net profit for the quarter came in at Rs. 62.18 crore as compared to Rs. 46.99 crore for same quarter last fiscal, yoy increase of 32.3%. The PAT margin for the stood at 5.83%.

JM Financials (NSE: JMFINANCIL) (Share Price: Rs.74.45): Potential Buy

Valuation: Attractive with TTM P/E 9.97x.

Reasons to consider: The company has entered into financing of affordable housing segment and also looking at having exposure in retail business. With post-money equity valuation of upto Rs. 7,175 crore for its NBFC subsidiary JMFCSL, JM Financial (Rs. 225 crore) along with external investor (Rs. 650 crore) will infuse Rs. 875 crore. This may lead to increase in the net worth of JMFCSL by 50 per cent.

Drivers: As banks are diminishing in Capital adequacy ratio and ability to give loan at lower rate, refinancing also offer a good opportunity for the company and will act as a major driver.

Financial: On the financial front, looking at the recently concluded quarter Q2FY19, the total consolidated revenue came in at Rs. 975.70 crore, showing 27 per cent YoY jump. The net profit after tax and before minority interest stood at Rs. 240.27 crore, posting 14 per cent YoY jump. Gross NPA and Net NPA stood at 0.5 per cent and 0.4 per cent respectively as of September 30, 2018 compared to 0.6 per cent and 0.5 per cent respectively as of June 30, 2018. The total loan book stood at Rs. 17108 crore as of Q2FY19 as against Rs. 16442 crore as of Q1FY19.

ACE (NSE: ACE) (Share Price: Rs.75.30): Potential Buy (10 Steps To Pick The Best Stocks)

Valuation: Undervalued with TTM P/E 13.28x

Reasons to consider: ACE, a market leader in the pick & carry cranes segment (>60% market share) currently enjoys a demand tailwind. Introduction of newer value added products is expected to boost topline while increasing utilisation levels will provide operating leverage benefits to aid ACEs bottomline.

Drivers: Robust sales of pick and carry cranes with launch of newer product, whereas boost in tractor sales will drive its margin further.

Financial: On the financial front the revenue for the quarter grew ~30% YoY to Rs.362.6 crore mainly driven by robust growth in cranes & tractors i.e. agri equipment segment,EBITDA margin fell ~250 bps YoY to 7.2% largely due to impact of higher steel prices (COGS, up ~460 bps YoY), offset by operational efficiencies due to incremental demand growth. EBITDA was at Rs. 26 crore, down 4.1% YoY. PAT de-grew 9.4% YoY to Rs.14.9 crore.

Cochin shipyard LTD (NSE: COCHINSHIP) (Share Price: Rs.342.05): Potential Buy

Valuation: Undervalued with TTM P/E 9.50x

Reasons to consider: CSL has a healthy order book of Rs. 1607 crore plus L1 status for ASW vessels (Rs. 5392 crore). It is also likely to receive order for phase III of IAC,which is likely to be ~Rs. 10,270 crore (Rs. 3000 crore as fixed price contract and Rs. 7270 crore as cost-plus contract). This takes the total order backlog to Rs. 17,569 crore (adding ship repair orders of ~Rs.300 crore).

Drivers: CSL has planned a huge capex of ~Rs.3000 crore over FY18-21E (Rs. 2768 crore for the new larger size dry dock and repair facility, Rs.100 crore for Hooghly Cochin Shipyard and Rs.150 crore for developing docks at Mumbai, this initiative will help to drive the stock further.

Financial: On the financial front, revenue for the quarter Q3FY19 rose strong by 16.5% YoY to Rs.716.4 crore. Shipbuilding revenues grew 35.4% YoY while ship repair revenues de-grew 20.7% YoY. We expected revenue of Rs.671.5 crore for the quarter EBITDA margins came in at 22.1% vs. 22.3% YoY. Gross margins declined 190 bps YoY due to higher contribution from the shipbuilding segment. Employee expenses grew only 6.9% YoY. Absolute EBITDA grew 15.5%YoY to Rs.158.5 crore Other income declined 2.5% YoY to Rs.49.7 crore. Accordingly, PAT grew 14% YoY to Rs.147.6 crore

NBCC (NSE: NBCC ) (Share Price: Rs.54.35): Potential Buy

Valuation: Fairly Valued with TTM P/E 26.45x

Reasons to consider: Till September ended quarter the company has bagged orders worth almost Rs. 10,000 crore, this resulted into overall order book of Rs. 80,000 crore which gives strong revenue visibility for the next 4-5 years. Besides, it has maintained its order inflows guidance of Rs. 25,000 crore for FY19. The government has announced modernization of 400 railway stations with an investment outlay of Rs. 1 lakh crores. NBCCs management has retained its revenue guidance for FY19E at 3035 per cent.

Drivers: The company has obtained approval from the supreme court to start the construction of two redevelopment projects Netaji Nagar and Sarojini Nagar. The management indicated that construction work for these projects would resume from the first month of 2019.

Financial: During Q2FY19, the companys standalone net sales surged almost 36.6 per cent to Rs. 1,541 crore from corresponding quarter of previous fiscal. However, EBITDA for the quarter declined almost 30 per cent to Rs. 59.11 crore from corresponding quarter of previous year. This can be attributed to change in accounting standard which resulted into decline in EBIT margin of PMC segment. The adoption of new accounting standards resulted into change in accounting treatment of advance payment of PMC margins. But higher other income led 16 per cent yoy growth in net profit to Rs. 85.96 crore.

Yes Bank (NSE: YESBANK) (Share Price: Rs. 185.3): Potential Buy (10 Steps To Pick The Best Stocks)

Valuation: Fairly valued at TTM P/E of 10.47x

Reasons to consider: The companys loan book is likely to grow ~30 per cent in FY19, while risk weighted assets growth would be slower than loan growth. Current focus within retail loans was on building a quality loan portfolio and, hence, yields are low. As the book grows, yields would increase (after FY20), when the bank starts taking-on additional risk.

Drivers: Better capital adequacy and lowering slippages are expected to put yes bank back to top in best asset quality class. Recently the stock has corrected heavily. The management succession plan is yet to be finalised and settled. Thus, at current valuation there is a good scope for value creation

Financial: On financial front, NII for Q3FY19 stood at Rs. 2666.41 crore. The NII rose by 41 per cent. The total income during this period stood at Rs. 8849.81 crore as compared to Rs. 6492.56 crore for same period last fiscal. Further gross slipages stood at Rs. 2297 crore. The IL&FS exposure was seen at Rs. 2530 crore which is the reason to see increase in NPAs. The provision coverage ratio was noted at 44.44 per cent. The net profit after tax noted at Rs. 1001.85 crore. The total loan book stood at Rs. 244000 crore which grew by 42 per cent YoY. The CASA ratio for the quarter stood at 33.3 per cent. Important ratios such as return on assets and return on equity stood at 1.1 per cent and 14.4 per cent respectively on annual basis.

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

Equity Intelligence: Latest Portfolio, Investment Strategy, Fees – March 2019

Equity intelligence is the SEBI registered portfolio manager, and fund management firm promoted by India’s guru investor Porinju Veliyath. Equity intelligence ranks among India’s best portfolio management service providers as its promoter. Let
Read More>>

Markets On Newer Highs Celebrate Holi With Green

Our Analysis This week the auspicious occasion of Holi was celebrated in India, However, D-street witnessed the early celebration of Holi with bulls dancing and fetching returns on thei
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>>

Share Market News: Today’s Nifty & Sensex Updates

Share Market News 20-March-2019
Read More>>

Election Date Disclosure Brings Flying Colours In The Market

Our Analysis This week the benchmark Indices have witnessed a decent upmove after the Election Commission announced Lok Sabha elections dates on Monday. The market also witnessed a ral
Read More>>