CHENNAI: Move away from Sensex stocks if you want better returns. A returns analysis of the 2,284 available traded stocks on the Bombay Stock Exchange shows that shares of 808 companies have beaten Sensex this year. Besides, another 600 stocks have delivered positive returns since January 1 even as shares of 30 companies in the barometer index have shed 6% so far this year.

Simply put: one out of three stocks has delivered Sensex beating returns, a CMIE data till February 16 shows. Tuesday’s 270-point correction isn’t expected to change the figures much. These numbers indicate that some traders and investors may have continued to reap benefits from investing in counters even as most eyes are fixed at the benchmark. Only 15 Sensex stocks have done better than the benchmark itself with Maruti Suzuki notching the best returns (19.3%) while DLF fared the worst (-44 .7%).

Stocks such as Vivid Chemicals (197.6%), B G I L Films & Technologies (180.3%), Commitment Capital Services (172.2%), Well Pack Papers & Containers (167.1%) and Spice Communications (140.4%) top the returns chart for the period between December 31, 2008 to February 16, 2009. These are followed by the likes of Oregon Commercials, Jhaveri Credits & Capital, Bhandari Hosiery Exports, Kadamb Constructions and Orissa Sponge Iron & Steel – all of which gave over 100% returns in this year.

“In our view, the environment is building up for stock pickers. For one, the correlation of returns between stocks and the market is unlikely to get much higher. Secondly, valuation dispersion is at an all time high. Combined with a high return-on-equity and earnings growth dispersion, the backdrop for stock pickers is actually quite good,” Morgan Stanley research head Ridham Desai said.

The analysis shows that investors who took calculated risks seem to have been rewarded in a short run. Over 600 stocks returned positive when most benchmarks struggled to be in green. The quality of stocks that logged positive returns were also not bad.

source: Economictimes

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