Value Stock below Rs 100: This Low PE, High Dividend Yield stock made a bullish crossover

The shares of PNB Gilts jumped higher by more than 5 per cent on Wednesday. The best part of the stock price movement on Wednesday, for bulls, was that the stock price jumped higher in the closing hour of the trade. Closing at near day’s high is considered bullish. 

PNB Gilts has been reflecting poor financial trend with degrowth seen in net sales and in net profits in the current quarter. A NBFC small cap company, PNB Gilts is a niche player- being the only listed primary dealer in India. The public shareholding in the company is 25.93 per cent. 

At current price the stock is trading at a PE multiple of 5.97 versus the industry average PE of over 40. The ROE for PNB Gilts is little over 17 while the dividend yield of PNB Gilts is little over 15 per cent. PNG Gilts has low institutional holding as on September 15.

PNB Gilt share price managed to close above the 20D SMA on Wednesday, indicating short term bullishness in the counter. The shares of PNB Gilts have taken support on three occasions at around Rs 62.70 per share levels, indicating the demand zone for the share. On Wednesday a bullish engulfing pattern was seen in PNB Guilts daily chart. 

PNB Gilts shares gained with spurt in volume indicating strength in the direction of the stock movement.

In the year 1996 Reserve Bank of India introduced the system of Primary Dealers with a view to strengthen the institutional infrastructure of Government Securities market. Six entities were granted licenses of which PNB Gilts was one. The Company was established as a wholly owned subsidiary of Punjab National Bank with an initial paid-up capital of Rs 50 crs.