• Mail Me @

    anand@wealthvidya.in

Stocks Recommendation for November 2017

stocks recommendation for November 2017 Post Feature Picture

I give here my stocks recommendation for November 2017 for safe investment.

 

The Rules of Stocks Recommendation for November 2017

I have set a liberalised yet strict rules such that besides being a member of our ‘Portfolio 2K15’, the stocks shall satisfy the four criteria prescribed below:

  1. The Price to Book Value (P2BV) Ratio shall be less than 1.50. This means we will allocate money to a stock under this rule to only those stocks that are available at or at a discount to the price to book value ratio of 1.50. This is liberalization from a stringent 1.00 earlier.
  2. The Price to Earnings (PE) Ratio shall be below 15. This is again liberalization from the tough hurdle of 10 earlier.
  3. The product/ combination of PE*P2BV shall be less than 22.50 (1.5*15)

The Dividend Yield shall be more than 4.00%. I reduced the dividend yield of Hindustan Zinc Ltd. (HZL) from the 9.25% shown by stock screeners. I made this adjustment since HZL had made a special golden jubilee dividend payment which distorted the normal dividend payment pattern.

Further, a mere good dividend yield is not sufficient. In addition, the stock must have passed at least one of the three previous tests. Meaning if the share proves expensive under the P2BV, PE and PE*P2BV criteria, it is ineligible for allocation merely on the grounds of an attractive dividend yield.

The total investable sum is taken as multiples of 20,000, that is Rs.20,000, 40,000 or 120,000 and so on, depending on the investible surplus available to you.

The basic unit of 20,000 is equally distributed among the four criteria at Rs.5,000 each or multiples thereof.

 

Summary of Stocks Recommendation for November 2017

This November 2017 all the stocks constituting our Portfolio 2K15 qualified, except National Aluminium Company Ltd. and Hindustan Zinc Ltd. Though these two stocks managed to qualify could not earn enough allocation even to buy a single share! On the other hand MOIL Ltd., which could not earn enough allocation for many months in past made the mark this month.

stocks recommendation for November 2017 - Total Allocation of Funds

Thus 12 stocks qualify for investment in November 2017.

 

Stocks Recommendation for November 2017 Based on Price to Book Value Ratio

Let us examine the stocks under the important price to book value ratio criterion.

stocks recommendation for November 2017 based on price to book value ratio

 

Stocks Recommendation for November 2017 Based on Price to Earnings Ratio

Please see the table depicting the stock recommendation based on price to earnings ratio criterion.

stocks recommendation for November 2017 based on price to earnings ratio

 

Stocks Recommendation for November 2017 Based on PE x P2BV Criterion

The product of the price to earnings and price to book value ratios is also an important criterion. As per value investing principles, this number shall not be more than 22.5 (1.5 * 15). Let us see what stocks pass this test.

stocks recommendation for November 2017 based on PExP2BV Ratio

 

Stocks Recommendation for November 2017 Based on PE x P2BV Criterion

The dividend yield is an important aspect of stock selection. Let us see how our stocks fare under this key criterion.

stocks recommendation for November 2017 based on Dividend Yield Criterion

 

Conclusion

To conclude my stock recommendation for this November 2017 is to buy the 12 stocks in the recommended numbers for each 20000 of your investment.

Happy investing!


Leave a comment

Your email address will not be published.

*

code

Subscribe Here