These single-digit PE stocks have high RoCE and a higher promoter holding. Worth a good look!

A high stake in the shares of the promoters is a positive sign as it shows the confidence of the promoters towards their own company. 

During childhood, we were narrated a story, ‘Elephant and the Blind Men’. The story goes as- Six blind men lived in a village and one day the villagers told them, “Hey, there is an elephant in the village today.” They had no idea what an elephant is. So, they decided, even though we would not be able to see it, let us go and feel it anyway.  

Every one of them touched the elephant. “Hey, the elephant is a pillar”, said the first man who touched his leg. Second man told it is like rope as he touched the tail, while the third one said it is like a thick branch of a tree, as he touched the trunk of the elephant, fourth one said it is like a big hand fan who touched the ear, fifth excitedly said, its like a huge wall as he touched the belly of the elephant and the last one told its like a solid pipe as he had touched the tusk of the elephant. 

While none of these men got it right, a similar scenario happens when an investor looking at analyzing a company comes across the various tools of financial analysis. He tries using each of them in isolation to one another. However, there is no fixed template when it comes to selecting stocks, as what suits one’s investing style may not be appropriate for the another individual. However, one of the famous checklists, which is used by many renowned investors might help you to pick a needle from a haystack! 

Here is the checklist 

High Promoter Holding: When it comes to investing in stock, one of the key factors to check is the company’s management and its promoters. Competent management with its promoters having honesty can take the company to new scales, along with building consistent wealth for the shareholders. A high stake in the shares of the promoters is a positive sign as it shows the confidence of the promoters towards their own company. 

PE Ratio: It is derived by dividing price i.e. current market price by EPS i.e. Earnings Per Share. 

Return on Capital Employed (RoCE): This ratio can help to understand how well a company is generating profits from its capital as it is put to use. 

So, here is the list of stocks with promoter holding equal or more than 70 per cent, PE ratio in single digit and RoCE above 20 per cent. 

Did this checklist help you? Do let us know in the comment section below.  

Happy Investing! 

7 comments on article "These single-digit PE stocks have high RoCE and a higher promoter holding. Worth a good look!"

Pradeep Kumar Sharma

I think your advice is bad as these are not investible. Over 5 years performance is no good, even variation is too much. Earning may be good if related to price but no visibility on profits or they don't share rewards with other investors as have monopoly on decisions so i consider it a bad advice.

11/12/2022 12:01 PM

MRITYUNJAYA V LATTE

-

11/12/2022 8:03 PM

ranganathan

What about the standing, integrity and track record of promoters? Mere low PE and high promoter holding will be deceptive! Low PE means market has no confidence in the company and its stocks.

11/12/2022 10:36 PM

Ashok Kriplani

Market cap is not mentioned.

11/12/2022 10:56 PM

amalesh bhattacharya

High promoters holding is mis leading please consider share of companies having high ROCE of public held companies

11/13/2022 11:01 AM

Swapan Chakraborty

Good

11/13/2022 2:03 PM

Dinesh Garg

Mr DalalStreet, either U don't have any financial,knowledge or U FEEL THAT PEOPLE R FOOL.

High promotor holdings may be because there is no taker. Low PE may be because these stocks are worthless. They can neither generate investor interest nor any profits.

Better STOP DALALI .

11/13/2022 9:00 PM

Please login or register to post comments.