Investors are always looking for best stocks to buy. They want stocks that will give the maximum gains. Investors look for stocks in large-cap, mid-cap, small-cap and penny stocks to buy.
Traders and Investors have to be careful about their stock selection. They must carefully evaluate the fundamentals of the stock to ensure that they are buying a stock of good quality and with good prospects to give gains.
Investors and traders must only buy those stocks which have the potential to outperform the Sensex and the Nifty.
The Sensex and BSE Midcap index have given a return of 1% and 12%, respectively in the last one year. So, the stocks picked for investment must give better gain than the Sensex index.
Buy stocks with consistent growth in profits
One way to ensure that the stocks that are bought by the trader or investor are of good performance is to see the past track record of the Company and determine whether the stock has shown a consistent performance in its sales and profit.
It is to be seen that while most of the large-cap companies are struggling to grow, there are 80 midcap stocks which have reported consistent growth in revenues over the past four quarters.
Some of these stocks are Manappuram Finance, Motilal Oswal, Capital First, Equitas Holding, Repco Home and Ujjivan Finance.
These stocks are from the NBFC and financial service sector.
The NBFC sector is expected to show strong growth in the near future and it is believed that the stocks from this sector are quoting at reasonable valuations are make a good buy at present.
A lot of other shares of companies like Gulf Oil Lubricants, Tata Elxsi, Delta Corp and First Source have reported good quarterly results are also doing well.
The financial results of these companies show that the earnings have grown between 15% and 100% in the last four quarters in terms of revenues and 15-200% in terms of profits.
So such stocks are also good stocks to buy now.