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High risk-reward: Stocks that have jumped up to 200% from 52-week lows

Data showed 127 of BSE200 stocks have hit their one-year lows this quarter.

, ETMarkets.com|
Updated: Dec 06, 2019, 12.10 PM IST
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YES Bank has climbed 117 per cent over its 52-week low of Rs 29.10 (hit on October 1).
NEW DELHI: A host of battered stocks have seen sharp rallies from their 52-week lows in recent weeks. Analysts said while some of these stocks have risen on prospects of high risk-reward, others have gained on value buying as investors judged the prevailing concerns as overdone.

Data compiled from corporate database Ace Equity showed 127 of BSE200 stocks have hit their one-year lows this quarter (October-December). Out of them, nearly half have climbed over 20 per cent, 35 have risen over 30 per cent and 16 stocks have rallied 50 per cent within a small timeframe.

Shares of Vodafone Idea have zoomed 196.55 per cent from their 52-week low of Rs 2.6 hit on November 15. YES Bank has climbed 117 per cent over its 52-week low of Rs 29.10 (hit on October 1). Corporation Bank has rallied 90.44 per cent from its October 15 low. Stocks such as Reliance Power, Coffee Day Enterprises, Indiabulls Housing Finance and Edelweiss Financial Services have gained 87 per cent, 83 per cent, 73 per cent, 68 per cent and 66 per cent, respectively.

Girish Pai of Nirmal Bang said that the situation has come to a place where it seems Vodafone Idea is going to survive for a few more years. This was against a bankruptcy-like situation earlier, he said. “That is what the stock price indicates,” he told ETNOW.

Edelweiss Securities says YES Bank looks like a high risk-return potential candidate, as its base case shows the bank is here to stay, braving the known and unknown challenges and a temporary lull in earnings.

In the case of Indiabulls Housing, CLSA has revised its price target to Rs 450 from Rs 350 as the recent clarity in court case pertaining to the company's alleged irregularities in books would provide some relief to the company.

DLF, RBL Bank, UCO Bank, Bharti Infratel are other BSE200 stocks that have rallied 40-65 per cent from their respective 52-week lows.

In a study, Elara Capital found that only three of the top 10 good performing Nifty stocks of last one month have been consistent performers on a three-month, six-month and year-to-date basis.

The median beta of top 10 performers of 2019 has increased from 1.03 to 1.41, suggesting that the market is shifting toward 'value' and ‘high-beta’ stocks.

Elara Capital says it is a sign of the market broadening from the narrow set of ‘high quality’ performers. It expects the trend to continue among Nifty50 stocks and more broadly across the broader market.

“After hanging on to quality for several months, year-to-date trends have started accommodating turnaround performers. However, the trend over the past month shows that the market is moving toward companies with lower sales growth, higher capital intensity and higher leverage, primarily due to the presence of metals (JSW Steel & Tata Steel) and telecom (Bharti Airtel & Bharti Infratel) among top 10 performers,” it said.
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