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Cherry Picking in Turbulent Times

Cherry Picking in Turbulent Times

There is such a thing as being too clever. Retail investors often run themselves ragged chasing hot tips about obscure stocks that promise lots and deliver negative returns.

There is such a thing as being too clever. Retail investors often run themselves ragged chasing hot tips about obscure stocks that promise lots and deliver negative returns.

Instead, why not stick to the safe and sound? The following stocks have many things in common. These are household names with decent financials and good prospects. Each has strong institutional coverage and ownership and a proven ability to deliver high returns. (India’s Most Wanted Stocks, MONEY TODAY December 28, 2006) Every one is rated a buy. So we devised a methodology to distinguish between the good and the excellent.

The stocks have been rated on the three key indicators of sales growth, EPS growth and return on capital employed. The top 16 got three stars which means these are compelling buys. The next 16 were assigned two stars and could be added. The bottom 16 got one star. These are good stocks but not screaming buys. ICICI Direct, India’s largest online trading portal, did the number crunching and gave opinions.