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Do you Sense a Bubble or not yet?

Discussion in 'Fundamental Analysis' started by shabbir, Jun 4, 2018.

  1. shabbir

    shabbir Administrator Staff Member

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    Here are the 5 companies in Departmental Stores sector and their respective PE multiples
    1. Avenue Supermarts Ltd - 121
    2. ABFL - 95
    3. Future Lifestyle - 75
    4. V-Mart Retail - 53
    5. Future Retail - 47
    Some of them may be great businesses but this is pretty similar to what we have seen in 2000 when PE Multiple of INFY / TCS were all in the triple digits. People made money even when they invested at the peak but the returns are almost inline with some of the other safer investment options.

    What's your call on this sector now?
     
    shabbir, Jun 4, 2018
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  2. abhijitupsc

    abhijitupsc Contributor

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    If something takes those many years to earn back my money, why should I bother myself for the sake of grandchildren?
    I am cautiously away from this sector although it very well fits into Lynch test..Thank you for initiating discussion on this sector.

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    abhijitupsc, Jun 4, 2018
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  3. chaitanya_mella

    chaitanya_mella Contributor

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    The bubble definitely exists. These mostly single digit OPM stocks would ideally be great stocks since consumption of day-to-day necessities will never stop. However, the valuations are so high that it is unlikely to sustain for too long.


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    chaitanya_mella, Jun 4, 2018
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  4. nirajshah

    nirajshah Champion

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    Yes I completely agree with your views. I also see some views about nifty going below 10k. What's your view about it ??

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    nirajshah, Jun 5, 2018
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  5. shabbir

    shabbir Administrator Staff Member

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    Too early to predict but one thing is for sure. There aren't any triggers for market to move high and cross the all time high levels. So it can't just remain at one point. I see slide coming and hope it is sooner than later.
     
    shabbir, Jun 5, 2018
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  6. chaitanya_mella

    chaitanya_mella Contributor

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    How would you deal with these companies you have listed?


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    chaitanya_mella, Jun 5, 2018
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  7. mk27418

    mk27418 Active Member

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    Thanks for discussion..Avenue supermarket was in my radar for future. It's high p/e stopped me, but it was still less than market p/e.

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    mk27418, Jun 5, 2018
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  8. nirajshah

    nirajshah Champion

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    nirajshah, Jun 5, 2018
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  9. shabbir

    shabbir Administrator Staff Member

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    Don't see them for investment unless they are the only one remaining in the market for investment. So look for alternatives.
     
    shabbir, Jun 6, 2018
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  10. Suresh_Sinha

    Suresh_Sinha Active Member

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    Yes a bubble for sure.
     
    Suresh_Sinha, Jun 7, 2018
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  11. jamsub

    jamsub New Member

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    Yes, valuations are high and other alternatives are there.
     
    jamsub, Jun 10, 2018
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