To pick 3 stocks under Rs 100, follow this step-by-step method:
Contents
Step 1: Screen for Stocks
- Price Filter: Set a filter to screen for stocks with a price under Rs 100.
- Market Capitalization: Focus on mid-cap and small-cap stocks to find growth opportunities.
- Sector Selection: Consider sectors with potential growth, like technology, pharmaceuticals, or consumer goods.
Step 2: Analyze Financials
- Revenue Growth: Look for companies with consistent revenue growth over the last few years.
- Profitability: Check the profit margins and earnings per share (EPS). Positive and growing EPS is preferable.
- Debt Levels: Select companies with low debt-to-equity ratios to ensure financial stability.
Step 3: Evaluate Valuation
- Price-to-Earnings (P/E) Ratio: Compare the P/E ratio with industry peers. A lower P/E may indicate an undervalued stock.
- Price-to-Book (P/B) Ratio: A P/B ratio below 1 might indicate a stock is undervalued relative to its assets.
Step 4: Check Market Sentiment
- Volume Trends: Look at the trading volume to gauge market interest. Consistent or increasing volume is a positive sign.
- Recent News: Investigate any recent news or developments that could impact the stock price, such as earnings reports, management changes, or industry trends.
Step 5: Assess Risk and Volatility
- Beta Value: Choose stocks with a beta value close to 1 for moderate risk, or less than 1 for lower volatility.
- Historical Performance: Review the stock’s price movement over the last 6-12 months for patterns of stability or growth.
Step 6: Diversify
- Sector Diversification: Select stocks from different sectors to minimize risk.
- Company Size: Choose a mix of small-cap and mid-cap stocks to balance growth potential and risk.
Step 7: Review and Decide
- Create a Watchlist: Add shortlisted stocks to a watchlist and monitor them for a few days or weeks.
- Final Selection: Pick the top 3 stocks that meet your criteria and have shown consistent performance.
List of 3 Amazing Stocks Under Rs 100
Reasons for Picking Stocks Under Rs 100:
Ujjivan Small Finance Bank
- Growth Potential: Operating in the niche of small finance, Ujjivan has significant room for growth, especially in rural and underserved markets.
- Strong Financials: Consistent growth in deposits and advances, with improving asset quality.
- Focus on Inclusion: Benefiting from government initiatives promoting financial inclusion, which aligns with its business model.
- Reasonable Valuation: Priced attractively with a strong potential for appreciation as the sector grows.
IRB Infrastructure Developers
- Infrastructure Boom: Positioned to benefit from the government’s focus on infrastructure development, including roads and highways.
- Order Book Strength: A robust order book provides visibility of revenue and growth over the coming years.
- Consistent Cash Flows: Generates stable cash flows from its toll road projects, ensuring financial stability.
- Undervalued Stock: Trading at a price below Rs 100 offers a good entry point for long-term investors.
IDFC First Bank
- Strong Retail Focus: The bank’s shift towards a retail banking model has shown promising growth in deposits and loans.
- Improving Asset Quality: Significant reduction in non-performing assets (NPAs), reflecting better risk management.
- Potential for Re-rating: The ongoing improvements in profitability and growth may lead to a re-rating of the stock price.
- Strategic Initiatives: Continuous digital transformation and focus on customer-centric products enhance future growth prospects.
These stocks are attractive due to their potential for growth, improving financial health, strategic positioning, and reasonable valuation, making them good picks under Rs 100.