Peter Lynch is a renowned American stock investor and mutual fund manager who managed the Fidelity Magellan Fund and is best known for growth at a reasonable price approach to investing. Lynch is often associated with the PEG ratio which measures PE ratios with growth rates.
Listed below are the stocks that are trading for below-average prices on a PE or PEG basis which are held by ace investors that fit in Peter Lynch’s idea of value investing:
Surya Roshni Ltd
With a market capitalization of Rs. 6,603 crores, the shares of the pipes manufacturing company started Friday’s trading session on a higher note at Rs. 584.45 compared to its previous close of Rs. 578.70. The company hit a high of Rs. 611, gaining around 5 percent, which is also company’s fresh 52-week high and closed the day at Rs. 606.05 apiece.
Having a look at the latest financial statements published by the company, the revenue and profits have shown a positive movement.
The revenue increased marginally by around 3 percent from Rs. 1,875 crores in the June quarter to Rs. 1,916 crores in the September quarter. In addition, the net profit increased by 29 percent from Rs. 59 crores to Rs. 76 crores during the same timeframe.
Due to consistent operating revenue and profits on a YoY basis, the profitability metrics of the company increased with the return on equity (RoE) increasing from 14.01 percent during FY 21-22 to 19.8 percent in FY 22-23. Moreover, the return on capital employed (RoCE) showed an upward movement from 16.16 percent to 22.94 percent during the same timeframe.
The share is considered to be undervalued as the PE ratio stands at 10.55 times during FY22-23 compared to the industry average of 20.51 times and the PEG ratio for the same period stands at 0.65 times, which means the market has underestimated its value with its projected earning potential.
According to the BSE data, Ace Investor Mr Mukul Agrawal, entering the stock in September 2022, currently holds 16 lakh equity shares equivalent to a 1.47 percent stake in this company. The current holding value of his investment amounts to Rs. 46.1 crores.
Chennai Petroleum Corporation Ltd
With a market capitalization of Rs. 10,312 crores, the shares of the petroleum products manufacturing company started Friday’s trading session on a higher note at Rs. 688.35 compared to its previous close of Rs. 684.90. The company hit a high of Rs. 702.45, gaining around 2 percent, and closed the day at Rs. 690.15 apiece.
Having a look at the latest financial statements published by the company, the revenue and profits have shown a positive movement.
The revenue increased by around 12 percent from Rs. 14,745 crores in the June quarter to Rs. 16,545 crores in the September quarter. In addition, the net profit magnified by 117 percent from Rs. 556 crores to Rs. 1,195 crores during the same timeframe.
Due to consistent operating revenue and profits on a YoY basis, the profitability metrics of the company increased with the return on equity (RoE) increasing from 59.66 percent during FY 21-22 to 75.2 percent in FY 22-23. Moreover, the return on capital employed (RoCE) showed an upward movement from 19.69 percent to 44.96 percent during the same timeframe.
The share is considered to be undervalued as the PE ratio stands at 1 time during FY22-23 compared to the industry average of 12.86 times and the PEG ratio for the same period stands at 0.12 times, which means the market has underestimated its value with its projected earning potential.
According to the BSE data, Ace Investor Mr Dolly Khanna, entering the stock in June 2022, currently holds 24,12,020 lakh equity shares equivalent to a 1.62 percent stake in this company. The current holding value of his investment amounts to Rs. 170.8 crores.
Elecon Engineering Company Ltd
With a market capitalization of Rs. 9,977 crores, the shares of the electrical equipment manufacturing company started Tuesday’s trading session on a higher note at Rs. 896 compared to its previous close of Rs. 889.95. The company hit a high of Rs. 903.50, gaining around 1 percent, and closed the day at Rs. 893.50 apiece.
Having a look at the latest financial statements published by the company, the revenue and profits have shown a positive movement.
The revenue increased by around 17 percent from Rs. 414 crores in the June quarter to Rs. 485 crores in the September quarter. In addition, the net profit zoomed by 22 percent from Rs. 73 crores to Rs. 89 crores during the same timeframe.
Due to consistent operating revenue and profits on a YoY basis, the profitability metrics of the company increased with the return on equity (RoE) increasing from 14.27 percent during FY 21-22 to 20.39 percent in FY 22-23. Moreover, the return on capital employed (RoCE) showed an upward movement from 17.71 percent to 25.82 percent during the same timeframe.
The share is considered to be undervalued as the PE ratio stands at 18.64 times during FY22-23 compared to the industry average of 36.58 times and the PEG ratio for the same period stands at 0.35 times, which means the market has underestimated its value with its projected earning potential.
According to the BSE data, Ace Investor Mr Vijay Kedia, entering the stock in June 2021, currently holds 16 lakh equity shares equivalent to a 1.620 percent stake in this company. The current holding value of his investment amounts to Rs. 163.1 crores.
Written By Vaibhav Patil
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