These 25 stocks are trading below their 5-year avg PE
The Indian market rebounded in November after having corrected significantly in September and October. The bounceback helped Sensex reclaim 36,000 and pushed Nifty over 10,900, but there is still plenty of action that one can expect from individual stocks. Half the stocks in the Nifty are trading below their 5-year average price/earnings multiple, which suggests there is still some value left in them.
Stocks that are trading below their 5-year average PE include Bajaj Finserv, HPCL, Eicher Motors, JSW Steel, Indiabulls Housing Finance, HCL Technologies, GAIL India, Infosys, Hero MotoCorp, Bajaj Auto, Cipla, and NTPC, among others. The stock market has remained volatile for most of 2018, despite Nifty climbing to a record high of 11,760 earlier this year. The rise in the index was supported by a handful of stocks, as others lacked momentum. Both Sensex and Nifty slipped after hitting record highs, but the pain was much worse in small and mid-cap indices, which saw double-digit falls from their respective highs.
The Nifty recovered a bit in November, but only a few names were responsible for it. But it is a known truth that consolidation offers an opportunity to buy quality names that are currently trading below their 5-year average PE.Generally, when a company is trading below its 5-year average PE, it is perceived to be undervalued. But to qualify as a stock worth buying, it should be backed by superiority in business fundamentals, experts suggest.But, is the valuation methodology enough for investors to hit the buy button? Well, maybe not, suggest experts. The general rule is that when a stock is trading below its 5-year PE, it usually indicates sluggish movement in price, which is further linked to earnings potential.
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