This Momentum Stock Shows 38% Upside!
Although the broader markets are down today, after hotter-than-expected US CPI data, with the benchmark Nifty 50 index tanking by over 92 points to 22,658, by 10:59 AM IST, investors can still find high-momentum stocks that are still going strong.
The easiest way to scout for such stocks from the universe of over 2000 is to use InvestingPro+ powerful screener “Stoks on the Rise”. This screener filters stocks that are making a buzz on the price chart across various time frames.
One stock that came on the radar is Kothari Sugars Chemicals Limited. It manufactures and sells sugar and its by-products in India and internationally and has a market capitalization of INR 479 crore. Promotors hold a massive 73.53% stake in the company which is close to the maximum limit of 75% and depicts confidence of the management in the future of the business. Even FIIs hold a 0.66% stake, as of December 2023.
In FY23, the company reported a 42.8% Yoy jump in revenue to INR 621.25 crore, higher than the total market cap of the company. The net profit increased by 23.19% to INR 41.92 crore in the same period, resulting in the highest-ever EPS of 5.06. Since FY15 at least.
On the financial health check, the stock has been given a rating of 4 out of 5 by InvestingPro+ which is a very healthy rating. This rating is given after analyzing over 100 factors across 5 different areas such as momentum, relative valuation, etc. A minimum score of 3 out of 5 is recommended to consider any stock for the portfolio. The price momentum score is also 4 which is what we look for when doing momentum investing.
Image Source: InvestingPro+
On the valuation front, after analyzing the stock with 10 financial models, InvestingPro+ has arrived at a fair value of INR 80.1 per share, a 39.1% upside potential from the CMP of INR 57.6.
While momentum trading in itself is a complete strategy, when combined with some valuation criteria can increase the rate of success multifold. This is what we attempted to do here by screening high momentum stocks from the screener and then looking for a high valuation gap among the list.
You can copy the same framework to build your own market-beating portfolio with InvestingPro+ which is now available at a limited-time discount of up to 69% or INR 526/month. Click here to supercharge your investment journey.
The article you’re referencing likely discusses Kothari Sugars Chemicals Limited, a company based in India that manufactures and sells sugar and its byproducts [1]. Here’s a breakdown of the key points:
- Momentum Stock: The article identifies Kothari Sugars as a stock with strong upward momentum, potentially due to recent positive performance or increased investor interest.
- Financial Performance: The company reportedly experienced a significant jump in revenue and net profit in FY23 compared to the previous year [1]. This could be a factor driving the stock’s momentum.
- Upside Potential: An analysis by InvestingPro+ suggests the stock has a fair value of ₹80.1 per share, indicating a potential upside of 38.1% from the current market price (as of June 15, 2023) [1].
Important Considerations
While the information sounds promising, it’s important to do your own research before making any investment decisions:
- Limited Information: The article focuses on a single source (InvestingPro+) for financial analysis. Conduct additional research to confirm the company’s financial health and future prospects.
- Past Performance: Past performance is not necessarily indicative of future results. Consider other factors that might affect the stock price.
- Overall Market Conditions: The broader market sentiment can significantly impact individual stocks. Stay informed about current economic trends and potential risks.
Here are some resources to help you with your research:
- Financial Websites: Explore websites like https://www.moneycontrol.com/ or https://www.screener.in/ for detailed financial data and analysis on Kothari Sugars Chemicals Limited.
- Company Website: Visit the company’s website (http://www.hckotharigroup.com/kscl/?q=node/4) to learn more about their business, financials, and future plans.
- Investment Advisors: Consider consulting with a registered investment advisor for personalized guidance based on your financial goals and risk tolerance.
Remember, investing involves inherent risks. Make informed decisions based on your research and risk tolerance.