Opportunities amid volatility; 6 smallcaps with high ROE and ROCE have upside scope of up to 36%

As the nifty continues to move upward, more small caps stocks are joining the party. Even on days when select stocks are bringing nifty under pressure, breadth of small cap seems to be holding out. ET screener powered by Refinitiv’s Stock Report Plus lists down stocks from small cap space with high upside potential over the next 12 months, having an average recommendation rating of “Buy” or Strong Buy and also meeting parameters like net margins and return on equity.

Even as nifty corrects, more small cap stocks are joining the party and on a number of days the breadth of the small cap segment is better than large caps. Coming on the list is auto ancillary unit to logistic company. ET screener powered by Refinitiv’s Stock Report Plus applies different algorithms & filters to all BSE and NSE stocks, and lists stocks which fulfill the various criteria as specified into the algorithms & filters to find those which might help navigate the stock market.

First to fall and last to rise, this is what sums up how small caps have acted for the last many decades on Dalal street. However the best return also came from this space if one had picked the stock. For which using the right financial parameters and other filters is required. ET screener powered by Refinitiv’s Stock Report Plus lists down stocks from small cap space with high upside potential over the next 12 months, having an average recommendation rating of “Buy” or Strong Buy and also meeting some parameters like net margins and return on equity.

Investing in small cap stocks is one of the toughest challenges for any investor. However, if an investor gets his decision right, the returns on investment on getting (ROI) are high. ET screener powered by Refinitiv’s Stock Report Plus lists down stocks from small cap space with high upside potential over the next 12 months, having an average recommendation rating of “Buy” or Strong Buy and also meeting some parameters like net margins and return on equity.

Nothing wrong in getting excited about Nifty moving up, but before one buys they should be clear what they are buying and why they are buying that particular stock. We looked at different parameters and made a list using Refinitiv’s Stock Report Plus which lists stocks with high upside potential over the next 12 months, having an average recommendation rating of “buy” or strong buy .

After refusing to leave the party when nifty and senex corrected for the last two months, small cap stocks witnessed correction in the last three weeks. One trend which has appeared is that on the day when the small index is down, the breadth of the whole segment is extremely weak. It is an indication that investors should put more checks and balances while navigating the small cap space. Also beware of rude shocks which this segment of the market may witness given the fact there are more headwinds ahead.ET screener powered by Refinitiv’s Stock Report Plus applies different algorithms & filters to all BSE and NSE stocks, and lists stocks which fulfill the various criteria as specified into the algorithms & filters to find those which might help navigate the stock market.

Reality of small cap stocks. Investor’s desire to own them “highest”. Their ability to find good quality stocks is “very low” and on top of it understanding the risk of investing in small cap “ lowest”. All these three things are relevant at this point of time. Everyone wants to buy small cap stocks, but they don't understand that the valuations are extremely high and so are the risks. For all those who still want to take exposure to them, in such times, it would be better to be cautious in selecting the stocks, better to go with buying in smaller quantities and keep some cash allocated for the stocks, but only to be used on the day when there is absolutely chaos on the street. Refinitiv’s Stock Report Plus which lists stocks with high upside potential over the next 12 months, having an average recommendation rating of “buy” or strong buy .