Value Stock: This Rakesh Jhunjhunwala owned PSU Bank has given a 22-month breakout with heavy volumes!

When Rakesh Jhunjhunwala buys a stock for the first time, investors interest in the counter is always elevated. Canara Bank is such a fresh addition to the ace investor’s portfolio which he has added in the September quarter. 

Ace Investor Rakesh Jhunjhunwala has been vocal about his opinion on PSU Banks being undervalued. He famously mentioned PSU Banks as “Hopelessly undervalued”.  Now when the shares of Canara Bank are catching up with the rest of the markets it is easy to once again notice the genius in Rakesh Jhunjhunwala.  The shares of Canara Bank gained by 4 per cent on Tuesday and are seen gaining momentum after bouncing from the 20D SMA on October 29. Canara Bank shares are in an intermediate uptrend and have soared by ~23 per cent in one month alone. 

Canara Bank beat market estimates this season with 200 per cent YoY jump in net profits at Rs 1,333 crore against Rs 444 crore previous year similar period. The healthy growth in other income and lower loan provisions helped Canara Bank surprise investors. The NII was down however while the net NPAs declined by 3.21 per cent. 

In one year, the stock of Canara Bank is up by 152.60 per cent while in 2021 alone the share price of Canara Bank is up by ~68 per cent. In past one week the stock has soared by more than 12 per cent. On daily charts the stock has formed a long green candle with closing near the day’s high, indicating almost a Marubozu Candlestick like Pattern. Such pattern with closing near day’s high price indicates bullishness in the counter.  PSU banks (select) are seeing a lot of interest from the investors and are considered value stocks at this point of time where the stock prices in general are trading with multi year high PE multiples. 

Bank of Baroda is up by more than 21 per cent in one month and is seen leading the pack of PSU banks along with SBI. Bank of Baroda is trading with a PE multiple of 14.26 while Canara Bank is available at a PE multiple of 8.15. 

A low PE stock with ace investor Rakesh Jhunjhunwala’s interest in it and stellar results in Q2FY22, also supported by price volume breakout on daily charts, Canara Bank is all set to catch investors fancy.  This value PSU Bank should be on investors watchlist!