Acronyms are an easy way to remember things and add a touch of curiosity and fun to boring topics. So why not stocks?
CNBC analyst Jim Cramer first gave the acronym FANG to a group of US stocks which are technology giants. These are Facebook, Amazon, Netflix and Google. It was then changed to FAANG when Apple was added to the list. These stocks are right on top of the performance list. The combined market cap of these stocks is 1.3 trillion dollars, which is higher than India’s GDP.
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These stocks were consolidated to represent the collective impact on the markets. These companies have rewarded investors with whopping returns. They are among the most valued companies in the World considering price-to-earnings ratio. Growth in these stocks is shockingly in triple digits. Apple’s share price grew 246% in value from January 2013 to August 2018.
These tech companies propped up the international markets, while other sectors including autos, financials and consumer staples have steadily fallen.
The answer is Amazon. Yes, analysts are pretty clear on which stock is likely to fetch greater returns in the year 2020. Value of Amazon was 30 times more than its past 5 year cash flow. It is estimated that cash flow for the year 2020 will be 11 times more than its estimated cash flow per share for the year 2022.
A more interesting fact is that it’s not Amazon’s e-commerce segment, but Amazon Web Series (AWS) which is driving the company’s growth.
We Indians are always good at adapting interesting things from the West. When FAANG was formed in the international stock market, we introduced our own acronym for the top-performing stocks of the Indian stock market. These are called the HRITHIK stocks. HRITHIK stands for HDFC, Reliance Industries, ICICI Bank, TCS, HDFC Bank, Infosys, and Kotak Mahindra Bank.
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These are stocks that are having a great impact on the stock market. Three of them have offered impressive returns to investors which are RIL, HDFC Bank and Kotak Mahindra bank. Most of these stocks are near their 52-week highs.
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Currently, these stocks are facing selling pressure. There has been a downward movement in these stocks due to economic dynamics.
Valuations of these stocks are rising steadily, and there is zero probability there could be a disappointment.
With an economic crisis, large institutional investors have limited themselves to HRITHIK stocks. Considerable economic growth can take place, only when investors start seeing value in the broader markets.
Analysts are of the opinion that small and midcap stocks would rise, after a crash last year. A few of them have already recovered. A few large-cap stocks from the public sector are also projecting enhancing trends. These are ONGC, GAIL, and OIL India. They are paying out a fairly large dividend. ONGC is offering a dividend yield of 6%. A tax benefit up to Rs 10 Lakhs on dividends improves the attractiveness of these stocks.
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Then we have the ROSHAN set of stocks. These are reliance communication, ONGC, Suzlon, HCC, Aban Offshore, and NDTV. They are the stocks facing a great fall. Investors are more likely to invest in these stocks believing they are really low and could rise. However, they can fall even lower, and experts are of the opinion that you must stay away from ROSHANs, while you focus on the HRITHIKs.
HRITHIK is defined as the mother of all stocks. They are the major wealth creators in the stock market for the last year. Analysts are of the opinion that they will continue to make remarkable changes in the stock environment. So, investing in them would be a safe play.
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