Under-performing for a decade – What happens next?

Under-performing for a decade – What happens next?

Have you ever wondered the future of those stocks that has constantly under-performed for a decade? Do you think it has any life left behind to rebound from the trough to bring some fortune to the investors? Is it wise to expect any reward in coming years or will it remains as under performers? Well if we can predict and foretell what is in the store for the future would you really believe in the thesis and bank your hand-earned money into these stocks? Believe me I neither do such predictions nor make any decisions based on some illogical & irrational forecast but if I take the numbers and parameters which are crucial for any stock movement & performance backed up with the analysts’ consensus I still see life in some of these stocks

Under-performed stocks of the decade

Company 10 Years return

As of 12th March
Industry PE Ratio ROE(%) Reuters  Analyst Consensus Recommendation
Reliance Infra -15.9% Power Generation 6.15
55.21% of Industry avg
6.13
105% of Industry avg
Outperform
IDBI -23.42% Public Bank 10.61
55.21% of Industry avg
5.64
56% of Industry avg
Hold
Oriental Bank of Commerce -34.5% Public Bank 7.12
104.55% of Industry avg
9.16
112% of Industry avg
Hold
Ranbaxy +52.1% Pharma NA
Loss making company
NA
Loss making company
Outperform
HPCL +85.49% Refineries 19.38
140% of Industry avg
8
75% of Industry avg
Outperform
National Aluminium +3.71% Aluminium 10.38
45% of Industry avg
5.34
100% of Industry avg
Hold
IOB -15.9% Public Bank NA
Loss making company
NA
Loss making company
Under-perform
Hindalco +10.72% Aluminium 12.39
45% of Industry avg
5.66
100% of Industry avg
Outperform

 

 

Our take on Reliance Infra

In this article we’ll describe what may happen to Reliance Infra stock. The price to earnings (PE) multiples of 6.15 (55.21% of Industry Average) which is supported by above average ROE against industry indicates the stock is cheap among the peers and may outperform the market and peers in future.

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