In the year when the 30-shares Bombay Stock Exchange’s (BSE) benchmark index — the Sensex — lost 24%, investors having shares of Hindustan Unilever, Divi’s Lab, Idea Cellular, ITC and LIC Housing Finance will be proud of their stock selection as these have emerged as the top five gainers in BSE-100 index in 2011.
The investors who invested in these stocks at the beginning of this year have got returns in the range of 16-32%.On the contrary real estate player HDIL, Unitech, Suzlon Energy, Essar Oil and Reliance Capital emerged as top losers in the calendar year as their share lost 63-70% in 2011.
“At the time of crisis, FMCG (fast moving consumer goods) stocks does good while when the going gets tough banks and auto stocks suffer,” said Jagannadham Thunuguntla, strategist and head of research, SMC Global Securities. “But retail investors should note that there is no guarantee that these stocks will maintain their place next year also.”
Out of the 100 companies in the BSE 100 index, only 16 were able to give positive returns while in the rest of the cases investors have nothing to smile. Due to the sovereign debt crisis in euro zone and concern on slowing growth in the domestic economy, the Sensex has fallen from 20,621 at the start of January this year to 15,455 on Friday.
{{/usCountry}}Out of the 100 companies in the BSE 100 index, only 16 were able to give positive returns while in the rest of the cases investors have nothing to smile. Due to the sovereign debt crisis in euro zone and concern on slowing growth in the domestic economy, the Sensex has fallen from 20,621 at the start of January this year to 15,455 on Friday.
{{/usCountry}}So what is the mantra to pick the gainers and avoid losers? Experts say the way to success in stock investing is proper research before investing.
“Retail investors should look at the corporate governance, promoters track record and financial parameter such as return on equity, company’s financial performance in the past years,” said Rikesh Parikh, vice-president, equities at brokerage and research firm Motilal Oswal Securities. “Next year is going to be challenging but we are bullish on sectors such as IT, FMCG and telecom.”
He suggested that investors should go for large cap companies if they have long-term investment horizon.