Stock picks of the week: 4 stocks with consistent score improvement and upside potential of up to 35%

As broader market indices witness minor consolidation, which normally happens when they are close to all time high as some resistance is bound to come. Some stocks have witnessed consistent improvement in their scores. The selected stocks depict a strong upward trajectory in their overall average score which is based on five key pillars i.e. earnings, fundamentals, relative valuation, risk and price momentum. This implies that there has been a significant improvement in their market outlook in the given time frame.

For the first four trading sessions of the week, it appeared that bears are finally waking up but then on Friday, it was bulls all over the street again. Better than expected GDP numbers, and high GST collections, probably were the trigger point for the bulls to once again stay in control. While it might be too early to say, there is a possibility that the market's may see a more bullishness in nifty than broader market breadth. Essentially, the probability of a selective correction which is essentially led by the profit booking continues to be high. At this time if one is looking to increase exposure, it would be better that they should look for stocks where there are some improvements in the business operating matrix that tend to weather the storm better. These selected stocks depict a strong upward trajectory in their overall average score which is based on five key pillars i.e. earnings, fundamentals, relative valuation, risk and price momentum. This implies that there has been a significant improvement in their market outlook in the given time frame.

While the correction has been going on in the market since the middle of July, it is only on days like Monday where everyone on the street feels that equity markets are correcting. It is only a matter of time that the concept of relative valuation will come into play and large caps will get more attention from the market. Stocks from different sectors are making to the list, this week, stocks from Oil refining and marketing, private banks, insurance, auto ancillary and fertilizer space. ET screener powered by Refinitiv’s Stock Report Plus lists down quality stocks with high upside potential over the next 12 months, having an average recommendation rating of “buy” or strong buy . The screener applies different algorithms for all BSE and NSE stocks.

It is after a long period of time that both indices and market breadth are indicating that finally there is a correction. Now just because the market is correcting that does not mean that money is not going to come to markets. There are still lots of investors who would be sitting on cash and looking to deploy fresh money. The question is in current market conditions with headwinds getting added to already existing ones like high valuations, what strategy should an investor follow so that fresh money which he is putting in performs relatively better?

Once again everything is looking green, the way FY 25 has started, it appears that bulls were on short term break due to tight liquidity conditions which tends to appear in the last month of every financial year. While the local liquidity condition might improve, the issue of high valuation is still not over. It is still a time to be cautious in terms of not going overboard with taking exposure to a certain stock, selective about what one is buying. The reason, if the street becomes selective and gets into correction mode once again, it is stocks where there has been improvements in the business operating matrix will be able to weather the storm better. These selected stocks depict a strong upward trajectory in their overall average score which is based on five key pillars i.e. earnings, fundamentals, relative valuation, risk and price momentum. This implies that there has been a significant improvement in their market outlook in the given time frame.