Investing in value stocks is a strategy that involves purchasing discounted stocks from solid companies and holding them for an extended length of time. Investment in these stocks focuses on quality companies that you believe are undervalued, and this judgement is supported by solid fundamental analysis.
In his classic book 'The Intelligent Investor,' Benjamin Graham, who invented the term value investing and is widely recognised as the father of value investing, summarises the essence of value investing: An investing operation is one that, after careful consideration, assures the protection of money and an appropriate return. Operations that do not match these criteria are speculative. Warren Buffett, a protégé of Benjamin Graham, adopted and perfected the value investing strategy, eventually becoming the wealthiest investor in history.
Founded in 1910, it is the country's leading cigarette seller and manufacturer. ITC is currently active in five business segments: FMCG and Cigarettes, Paperboards, Hotels, Packaging and Agri-Business. ITC's stock has grown steadily over the last year, but given its broad goods and potential for development, the stock remains appealing.
The possibility of cigarette price increases, robust underlying performance with better profitability in the Foods portfolio, a brighter outlook and potential demerger for the Hotel company, and a narrowing valuation gap all bode favourably for the stock's sustained success.
It is a financial services and infrastructure provider with seven business verticals: Electronic Payment Collection Services, Mutual Funds Services, Alternative Investment Fund Services, Insurance Services, KYC Registration Agency, Non-Banking and Banking Services and Software Solutions.
With a nearly 70% based aggregate market share on mutual fund average assets under management maintained by clients and serviced, the company is India's largest transfer agent and registrant of mutual funds. The scope of its services to mutual funds includes many aspects of its interactions with distributors, investors and regulators. CAMS plays a vital role in building and sustaining its clients' market perception by offering a variety of services.
It is the country's second-largest gold-financing NBFC. The company has also expanded into Vehicle Loans, Micro-Finance and MSMEs. The company has around 5,000 branches across India.
In the gold loan sector, there was fierce price competition, with competitors offering appealing teaser rates to entice customers. As a result, the margins for the players engaged shrank. This, however, has been halted for the past two quarters by gold financiers.
It is India's third largest private sector bank. The bank's total assets were at Rs 11.75 Lakh Crore as of March 31, 2022. The bank has 4,758 branches in India, as well as 16,900 ATMs and cash withdrawal/deposit machines. Through several distribution channels, the bank provides a wide range of financial services and banking products to commercial, retail and wholesale customers.
Axis Bank has improved its NIM, asset quality and profitability during the last three years. The bank has also shifted gears in terms of digital infrastructure development and investment. The bank's ongoing efforts to strategically expand its asset portfolio (retail loans account for 57% of the total book) focus on margin expansion, declining credit costs, mobilisation of low-cost granular deposits and an improved return ratios matrix, all of which are encouraging signs for future earnings growth.
Larsen & Toubro, India's largest construction corporation, specialises in high-tech manufacturing and EPC projects. The corporation primarily operates in heavy engineering, infrastructure, power, defence engineering and hydrocarbons.
The CAPEX cycle has picked up, spearheaded by government expenditure, and private firms are anticipated to join soon. L&T appears to be one of the strongest CAPEX plays in the capital goods industry in this environment. The company appears to be on track to fulfil its revenue projection of 15% in FY23.
The Russia-The Ukraine crisis and the pandemic outbreak have ruined economies and wasted years of savings. In times like these, cash on hand enables businesses to continue operations. Markets are likely to reward companies that generate strong free cash flows in such a tough climate. Companies which can service their debt and other fixed obligations through reinvestments and cash accruals. As a result, investors should concentrate their portfolios on such stocks.
Investing in value stocks is typically connected with long-established organisations. Investing in value stocks is not meant to make you rich overnight, and that is not the reason for investing. If you've ever heard the saying "slow and steady wins the race," it's one of the best phrases to summarise the value investing method.