Upstox Originals
Does market correction come with opportunities?
5 min read | Updated on January 15, 2025, 18:50 IST
SUMMARY
Unlike avid investors, retail investors are not always equipped to capitalise on a market correction. Did you know some stocks are trading at 2020 prices or near their 52-week lows? In this article, we introduce two stock screeners to help you get started. However, exercise caution, some stocks may never recover. Use these screeners as just one among the many tools in your investment strategy.
As markets correct do the number of investment opportunities increase?
“If you’re in the market, you have to know there’s going to be declines.” - Peter Lynch
Yes, markets have been correcting, which is just a nicer way to say that your portfolio has been losing value for some time now (maybe even faster than you thought).
That said, our article on market volatility 101 tells you that a savvy investor is greedy when others are fearful and vice versa. So, if you are one of those investors looking to ‘make hay while the sun is shining’, do keep reading.
One of the key challenges an investor faces is - the first step. How should one go about looking for an opportunity?
Our long-time readers know that we do not dole out investment advice, but we can certainly help you with a starting point. To that end, we have curated two stock screeners for you, which should help you get started.
Screener 1: Stocks available at January 2020 prices!
Check out the screening criteria:
- Absolute return over 5 years < 5%
- ROE > 15%
- CAGR profit growth for 5 years > 15%
- Market capitalisation > ₹5,000 crore
| Name | Sector | Market cap (₹ Cr) | ROE (%) | 5-year return (%) | Profit growth (5 years %) |
|---|---|---|---|---|---|
| Kotak Mahindra Bank | Bank | 3,47,781.3 | 15.4 | 4.3 | 23.2 |
| IndusInd Bank | Bank | 74,866.9 | 15.3 | -35.1 | 22.1 |
| Berger Paints | Paint | 53,948.8 | 21.9 | 4.7 | 18.4 |
| Indraprastha Gas | Gas Transmission | 28,787.5 | 22.4 | -3.1 | 17.3 |
| Kansai Nerolac Paints | Paint | 19,709.0 | 23.1 | -29.3 | 20.4 |
| Manappuram Finance | Finance | 15,185.0 | 17.2 | 1.8 | 16.0 |
| Ujjivan Small Finance Bank | Bank | 6,525.3 | 31.7 | -35.8 | 45.1 |
Source: Ace Equity; *Data as of January 14, 2025
Screener 2: Stocks near their 52-week lows!
With similar stringent filters for quality, we looked for stocks trading near their 52-week lows. Below is a list of 22 stocks that are ~5% away from their 52-week (52W) lows.
Check out the screening criteria:
- Current price ~ 5% away from 52-week low
- Return on equity > 20%
- CAGR profit growth for 5 years > 15%
- Market capitalisation > ₹5,000 crore
| Name | Sector | Mar cap (₹ Cr) | ROE (%) | Distance from 52W low (%) |
|---|---|---|---|---|
| LIC | Insurance | 5,28,706.5 | 63.5 | 3.6 |
| Coal India | Mining & Mineral products | 2,30,732.5 | 52.0 | 3.6 |
| Asian Paints | Paints | 2,13,891.6 | 31.4 | 0.4 |
| Nestle India | FMCG | 2,11,632.5 | 135.3 | 2.3 |
| IOCL | Refineries | 1,78,986.7 | 25.7 | 4.6 |
| Tube Investments | Steel | 63,917.9 | 26.5 | 2.6 |
| IRCTC | Railways | 60,732.0 | 40.5 | 2.1 |
| Tata Elxsi | IT | 38,095.9 | 34.5 | 3.3 |
| KPIT Technologies | IT | 36,832.6 | 31.2 | 4.7 |
| Sona BLW Precision | Auto Ancillary | 35,487.4 | 20.9 | 2.9 |
| MRPL | Refineries | 24,142.0 | 31.9 | 4.0 |
| Elgi Equipments | Capital Goods | 16,423.8 | 20.6 | 1.0 |
| Ventive Hospital | Hospital | 15,627.4 | 65.7 | 2.4 |
| R R Kabel | Cables | 14,891.7 | 20.8 | 1.6 |
| Birlasoft | IT | 14,608.7 | 22.5 | 1.7 |
| GE Shipping | Shipping | 13,087.4 | 21.0 | 3.0 |
| JK Tyre & Industries | Auto Ancillary | 9,971.6 | 20.6 | 4.1 |
| Tanla Platforms | Auto Ancillary | 8,882.7 | 31.7 | 4.4 |
| CPCL | Refineries | 8,569.9 | 36.5 | 2.3 |
| P N Gadgil Jewe. | Jewellery | 8,176.5 | 32.4 | 1.9 |
| Share India Securities | Financials | 5,933.4 | 30.9 | 4.2 |
| Easy Trip Planners | E-commerce | 5,018.4 | 31.9 | 1.6 |
Source: Screener; *Data as of January 14, 2025
Should I just invest in them?
As we mentioned above, these screeners are to help you get started. If you found something interesting, dig in and definitely research it more before making any investment decision. Optically screeners do present investments that look attractive, but it is likely that some of these stocks might never recover their previous glory. As much as you would like to wish it away, there is no alternative to thorough research.
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