5 Undervalued Stocks - Best Stocks to Buy ? in All Time High Stock Market | Detailed Stock Analysis

Summary

In this video, the speaker discusses undervalued finance and banking stocks, highlighting opportunities in sectors like private banks, small finance banks, housing finance companies, brokerages, and healthcare. They analyze five stocks, including Sur Small Finance Bank and AAS Financiers, considering their financials, growth potential, and challenges. The speaker emphasizes the importance of research and understanding stock valuation, recommending 'Stock Investing Mastermind' for further learning. The video serves as a guide for investors to make informed decisions, with a focus on long-term potential.

Takeaways

• 📈 The stock market offers ongoing opportunities despite many stocks reaching all-time highs, with certain sectors like private banks, small finance banks, housing finance companies, IT sector stocks, and healthcare remaining undervalued.
• 🏦 Sur Small Finance Bank is identified as an undervalued stock with a market cap of 2,000 CR, a PE of 8.5, and a Price to Book ratio of 1.13, showing good growth in advances and loan disbursements.
• 📊 Sur Small Finance Bank's management has provided growth guidance of 30-35% in advances, indicating a positive future outlook despite challenges in asset quality and concentration of branches.
• 🏡 Avas Financiers, a housing finance company, is highlighted for its potential due to the expected growth in India's housing sector and benefits from interest rate cuts by RBI.
• 📊 Avas Financiers has shown a loan book growth of 22% year-on-year and a net profit growth of 15% year-on-year, with a maintained gross NPA around 1%.
• 📉 Despite the overall market being at an all-time high, banking stocks like Access Bank are undervalued, with the industry facing challenges in deposit growth and high interest rates.
• 💹 The potential for private banks to outperform in the medium to long term is suggested, as they are considered safer bets with potential for significant returns.
• 📚 The speaker recommends 'Stock Investing Mastermind' by Zebra as a resource for learning about stock market investments, from basic to advanced levels.
• 🚩 The speaker emphasizes the importance of doing one's own research before investing, as understanding the reasons for buying a stock is crucial for timely selling.
• 💡 The video script serves as a reference for research rather than a direct recommendation, urging viewers to consider the analysis and make informed decisions.

Q & A

What is the current status of Nifty and the stock market in general according to the transcript?

Nifty is at an all-time high, and many good stocks have already given three-digit run-ups, with most popular stocks being overvalued.

Which sectors are suggested as undervalued and potentially good opportunities for investment?

The sectors suggested as undervalued and potentially good opportunities for investment include private banks, small finance banks, housing finance companies, brokerages, and healthcare.

What are the pros and cons of investing in Sur Small Finance Bank as discussed in the transcript?

Pros include a low PE ratio, good growth in advances and loan disbursement, and a management growth guidance of 30-35% in advances. Cons involve high concentration of branches in three top states, a decline in collection efficiency, and potential reduction in net interest margin due to an increase in secured loans.

What is the significance of CGTMSE for Sur Small Finance Bank's loans?

CGTMSE (Credit Guarantee Fund Trust for Micro and Small Enterprises) is a government scheme that guarantees loans up to 75%, reducing the risk for lending institutions like Sur Small Finance Bank.

How does AAS Financiers' loan book growth compare to the industry average?

AAS Financiers' loan book grew by 22% year-on-year, and loan disbursement grew by 133% year-on-year, indicating strong growth compared to the industry average.

What is the current gross NPA ratio for AAS Financiers, and is it considered healthy?

The current gross NPA ratio for AAS Financiers is around 1%, which is considered healthy as it indicates a low level of non-performing assets.

Why have banking stocks, including Access Bank, not performed as well despite the market being at an all-time high?

Banking stocks, including Access Bank, have not performed as well due to challenges in deposits growth and high interest rates set by the RBI, which have increased the cost of borrowing and affected net interest margins.

What is the potential impact of US Federal Reserve rate cuts on private banks in India?

As the US Federal Reserve starts cutting rates, it's expected that Foreign Institutional Investor (FII) money will flow back into Indian markets, potentially benefiting private banks.

What is the current PE ratio of Access Bank, and how does it compare to its 5-year median and industry average?

Access Bank currently has a PE ratio of 13.9, which is lower than its 5-year median PE but slightly over the industry PE of 11.65.

What is the book 'Stock Investing Mastermind' and how can it help investors?

The book 'Stock Investing Mastermind' is a structured guide for learning stock market investments from basic to advanced levels. It provides an eight-step framework for researching stocks, analyzing financials, identifying multibagger stocks, and understanding valuation methods to maximize returns.