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 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 buy for 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

HDFC BANK Ltd. (NSE: HDFC BANK) (Share Price : Rs.2,301): Potential Buy

Valuation: Over-Valued stock with TTM P/BV of 5.85x.

Reasons to consider: HDFC Bank Limited is India's largest private sector bank. The Bank offers a range of banking services covering commercial and investment banking on the wholesale side and transactional/branch banking on the retail side. It also offers financial services. The Bank's segments include Treasury, Retail banking, Wholesale banking and Other banking business. HDFC Bank PAT growth has been consistent at 20% since FY16 vs. 30% in the past and grew to Rs 17457 crore in FY18. In Q3FY19, 54% was retail (Rs 420900 crore) & 46% corporate book of Rs 360051 crore. In Q3FY19, personal loans & credit cards continued their strong growth trajectory. It enjoys the largest market share in credit cards, which fetches higher margins and returns.

Key Drivers: The bank is well placed to harness both retail & expected corporate pick-up. The bank has a strong liability franchise with CASA of 48% and retail term deposit comprises more than 80% of deposit of Rs 788770 crore as on FY18. Compare to others banks, it has maintained stable asset quality where its GNPAs & NNPAs remain in range of 1-1.5% from past 20 quarters. Considering, the healthy balance sheet growth, superior asset quality & management, the bank is well poised to deliver consistently with superior margin & robust return ratios. However, the bank has always trades with premium valuation. One can buy the stock at correction.

Financial: Its annouces Q3 result where, Net interest income stood at Rs 12576 cr in Q3FY19 vs Rs 10314 cr in Q3FY18. Net advances grew by 24% YoY to Rs 780951 cr. CASA de-grown by 320bps to 40.7% YoY. Net profit up 20% to Rs 5585 cr Vs Rs 4642 cr YoY. NIM remain stable at 4.3% YoY.

Mahanagar Gas Ltd. (NSE: MGL) (Share Price : Rs.1,034): Potential Buy

Valuation: Fairly-Valued stock with TTM PE of 17x.

Reasons to consider: Mahanagar Gas Ltd. (MGL) reported revenues of Rs 752 crore in Q3FY19 and volume growth at 8% YoY for Q3FY19. Whereas, CNG segment grew at 8%YoY, while total PNG growth stood at 7% YoY . Within PNG, domestic volume grew at 13% YoY. After EBITDA/scm of Rs 8.1 in 6MFY19, the same grew to Rs 8.8 in the quarter.

Key Drivers: With MGLs fundamental growth story in place and a positive sectoral outlook, the company can deliver a strong performance with govts continued focus towards the use of cleaner fuels. The Discounted prices of CNG as compared to alternative fuels (petrol, diesel) makes it preferable. And thereby expected to aid the conversions to CNG. Further, to address the lower penetration, management has putting efforts and aiming to accelerate it with recent critical approvals for Raigad regions. Moreover, MGL's revised CapEx guidance to Rs 375 crore suggests its optimistic plans towards penetrating aggressively in tier 1 & tier 2 cities.

Financial: Net sales of Rs 752.68 crore in Q3FY19 vs Rs. 581.41 crore in Q3FY18 up 29.46% YoY. Net Profit at Rs. 148.32 crore in Q3FY19 vs Rs. 123.98 crore in Q3FY18 up 19.63% YoY whereas, EBITDA stands at Rs. 259.48 crore in Q3FY19 vs Rs. 215.03 crore in Q3FY18 up 20.67% YoY.

Bata India Ltd. (NSE: BATAINDIA) (Share Price : Rs.1340): Potential Buy

Valuation: Over-valued stock with TTM PE of 58x

Reasons to consider: Bata India Ltd had posted a strong performance in the December quarter with revenues growing 15.5 percent to Rs 778.7 crore YoY and net profit higher by 51.3 percent to Rs 103.2 crore YoY. It has reported double digit revenue growth with Same Store Sales Growth(SSSG) grew 12% for the quarter and margins for the quarter improved significantly by 350 bps to 58.6% YoY.

Key Drivers: Company efforts towards premiumisation of product portfolio yielded better operating margins and will remain better in coming quarter. It has concentrated on redesigning of its existing store model with specific focus on various categories like sports, youth and women which will drive the growth in coming quarter. Management has a plan to add 150 stores in FY19 (100: COCO, 50: franchisee)

Financial: In Q3FY19 Net Sales was Rs 779 crore Vs Rs. 674 crore in Q3FY18 up 15.5%. Net Profit at Rs. 103 crore in Q3FY19 up 51.3% from Rs. 68 crore in Q3FY18, whereas EBITDA stands at Rs. 163.6 crore in Q3FY19 vs Rs. 111.5 crore in Q3FY18 up 46.8% & EBITDA Margins at 21% in Q3FY19 vs 16.5% in Q3FY18 up 447bps.

Asian Granito India (NSE: ASIANTILES) (Share Price : Rs.227.65): Potential Buy

Valuation: Fairly-Valued stock with TTM PE of 16x.

Reasons to avoid: AGL is one of the top three market players in the Tiles & Ceramics business. The company has PAN India presence with 289 exclusive showrooms. Its continuing focus on the retail segment by launching a new product in its high margin segment marble & Quartz is expected to drive margins for the company. Improving demand and management guidance further adds earnings and margin visibility of the business. AGL has posted a robust revenue and profitability growth of 15% and 25% coupled with ROCE of 16% and ROE of 13% in the past 5 years. The stock is technically trading at the bottom levels.

Key Drivers: The well-diversified business among government and institutional clientele and the increased focus on the retail business remains one of the key drivers of the business. Moreover. Tiles and ceramic segments are expected to get a boost from the governments initiative to build 20 million affordable houses under PMAY

Financial: In Q3FY19 Net Sales was Rs 296.22 crore Vs Rs. 263.78 crore in Q3FY18 up 12.3% YoY. Net Profit at Rs. 4.63 crore in Q3FY19 down 60.4% YoY from Rs. 11.70 crore in Q3FY18, whereas EBITDA stands at Rs. 24.98 crore in Q3FY19 vs Rs. 36.96 crore in Q3FY18 down 32.41% YoY.

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 p3600 short term 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.

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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.

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