Investors may think of stock investing in 2023 after a fair amount of research into companies and markets. One way that investors go about searching for the “right” stocks to invest in is to monitor the stocks that are included in most leading mutual funds. After all, a mutual fund is a basket full of varied stocks, either of a particular sector or industry, or a mixed bag. Furthermore, a mutual fund manager makes a selection of the stocks after close scrutiny of its position and other fundamental and technical analysis.
One may argue whether this is a good way or a bad way to go about searching for potentially lucrative stocks, but it lets you sieve out stocks quite easily. In the end, how investors select stocks to invest in largely depends on their aims and financial plans. Whichever way investors choose to sift out stocks for investment, reading about certain stocks in the news and doing some background research always helps.
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At the close of March 2023, ET Markets conducted a study and found that 23 stocks were added to portfolios of more than fifty mutual funds. Out of these stocks, there were a few that stood out as they gave a 30% or above return in the previous one-year period (Data Source: Ace Equity). This was a significant jump from last year’s addition of stocks to mutual funds (March 2022).
In the selection of stocks, investors look for those companies that have a robust performance to back them up, are low on debt, and have good fundamentals overall. Just by paying heed to analysts’ picks, investors cannot choose stocks to invest in objectively. Investors must do their own research and analyse whether stocks may pose investment potential according to different parameters like growth potential, market value, market penetration and more.
The financial year 2023 was scarred by inflation, the highest ever in decades, and aggressive monetary policies coming forth by global central banks. Then, the crisis in Ukraine enhanced this already-marred atmosphere and the Indian equity markets experienced hardly any gains for investors. This is no reason not to invest in 2023. There is bound to be a cyclical upward progression in the markets and the sectors that are touted to do well are infrastructure, banking, real estate, telecom and auto. With inflation falling under RBI’s band of tolerance (2% to 6%), investors may be ready to invest in the following stocks:
This is one of the very few stocks in the category of large capitalisation stocks which is available at a reasonable valuation. With high growth potential, SBI is a stock you may consider as it has robust retail loans and has picked up its business in the segment of corporate banking.
Infosys is a technology stalwart, among other segments and it continues to witness some traction in its deal-making ability. The company is a long-term beneficiary of acceleration in spending in IT, given the company’s capabilities centring around digital and cloud transformation.
The company holds a dominant place and a market share in several of its operating verticals. It also holds the distinction of working on large contracts like the improvement of the health of the Hyderabad Metro Project. The company boasts robust projects in the pipeline, connected to the sectors of metro, railways and road, as well as building factories and other industrial structures.
With a positive outlook in the industries of hospitality, a healthy margin outlook for cigarettes, a sound sales momentum in the business of FMCG and better allocation of capital in the past few years, ITC may be considered for investment.
One of the prominent leaders in the segment of affordable vehicles, Maruti Suzuki is poised to be one of the big players in the auto sector in 2023. On a firm footing to see a revival in its market share and with new launches on the horizon, the company may witness a fruitful period ahead.
Axis Bank has been witnessing strength in the growth of its retail and mid-corporate banking segments. Along with these, MSME growth is also a driver of good performance by the company.
There is some positivity in this company as there is a case-mix that proves favourable and rising occupancy drives lucrative prospects in healthcare services. The company has a robust position as a franchise in the Pharmacy area with strong store additions. Furthermore, there are possibilities of ongoing investments for the enhancement of the company’s franchise under Apollo 24/7.
The forceful growth in infrastructure is driving the growth of cement companies, and Ultratech is a top cement company which will see some advantages. With demand in the building and construction industries expected to pick up, the company could see a corresponding growth in its volume of business.
There are many channels of investment out there and stocks are just one which investors may opt for. In any financial portfolio, there must always be room for diversification and a mixed bag of stocks, and other investment instruments should be the idea behind sound investing strategies. Finally, investors could consider investing in different instruments, including stocks, according to their distinctive objectives and financial plans.