Dalal Street has been buzzing with analysts claiming that the time has now come to personal midcap stocks following years of underperformance when compared to the huge-cap equities. “The midcap index has resolved out of bear phase as it logged a resolute breakout from the three years falling trend line, indicating resumption of a major up trend,” mentioned brokerage and investigation firm ICICI Direct. Aided by the view that broader markets are most likely to outperform the benchmarks, analysts at ICICI Direct have chalked out how they would construct a midcap momentum portfolio for the medium term to extract maximum returns from this bullish outlook for the broader markets.
“Within midcap space, we have spotted the consumer discretionary sector based on its higher relative strength ranking, where we can capture higher beta,” the brokerage firm mentioned. The highest weightage in the portfolio has been allocated to Voltas with a weight of 26.1% or 4 equity shares. Currently, the stock trades at Rs 909 per share following surging 64% in the final six months.
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This is followed by 20.2% allocation to Crompton Greaves. This allocation translates to 7 equity shares of the firm. Stocks of Crompton Greaves have jumped 61% in the final six months and have more than doubled considering that the March 2020 sell-off and now trade at Rs 395 per share. ICICI Direct has additional added V-Guard Industries to the portfolio with an 18.9% weight, translating to 12 equity shares. V-Guard has currently surged 15% considering that the starting of this year and in the final 6 months, it has gained more than 25%.
Symphony is an additional stock in the midcap momentum portfolio with a weight of 15.7%. Currently, the stock trades at Rs 1,097 per share, following possessing surged more than 33% considering that the starting of December final year. The final addition to the midcap portfolio is Bajaj Electricals with a 19.2% allocation, translating to roughly 4 stocks of the firm. The stock trades at Rs 707 per share, possessing jumped 79% in the final six months.
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According to ICICI Direct, the investment allocation towards this portfolio ought to be about Rs 13,363, benchmarked against Nifty 500 index. The brokerage firm has categorised this portfolio as a medium-term higher-threat portfolio. Potential returns variety amongst 8% to 15%.