Infosys reported 22.72% down in sales growth on its fourth quarter, and a 59% increase in its earnings, while its net profit was at 33.72%. When sales is down and earnings is higher, this posts a glare picture that the company is not profiting from its operations and rather is using other methods to shore up bottom line. This is not healthy for the company which once was the darling of the technology line or order.
The EPS ranking for the stock is at 70.67 which means there are about 30% of the companies from the list of 864 stocks tracked in our BTT index that have better earnings growth that Infosys. If you want to have world class earnings on your investments, you would be with the stocks that have top class earnings and not the mediocre stocks. In that manner Infosys is a clear no no in any serious investors portfolio.
Mutual Funds have mopped up above 7 lakh shares of this stock while selling about 1.76 lakh shares, does this mean that the informed lot is doing a mistake in holding this stock. At times even the best of fund managers make mistakes, that is the investment game. But soon they will realize their mistakes and off load the stock. The MF figures that we are talking about is of Feb'12, while we can see on the price front the stock has tanked and is reaching for lower lows. Bear have a clear hug on this stock. Indicators are favoring bear strength, so, do not get emotional or sentimental to hold this stock because it is the top market cap leader of for that matter even the best tech company. It was once so, but not now.
As fourth quarter results start flowing in, ranking orders will change dramatically and give us a clear picture of which stock is the leader. Waiting in patience to get hold of those stocks will give decent return on investments. Trading or investing is not a day to day affair, we need to be cautious, wait for the right opportunity and grab the bucks when they are put before us.
Keep a close watch on our columns and track the recommendations in our bttcalls.com section to find the best stocks to trade and make profit from. TATAMOTORS one of our trending calls which got its entry at 272 after a big run up has mopped up more that 10% in gains within a week after its entry. If you have to make money in stocks follow the leaders not the laggards.
BTT opinion: If you are holding Infy in your portfolio it is time to think of an exit and place the same funds in some high growth stocks. At the end of the it is money that counts, not sentiments. Later when the stock completes its bear phase and is ready for a bull run we will sure get an opportunity to enter and profit from this stock, in case if there is a chance to do so.
Team BraViSa.
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