Stocks with large moves in May 2022

In the month of May 2022, the Nifty50 index saw a decline of 3.03%. However, many stocks moved much higher and lower in the same time frame. Let us look at some of these stocks and what drove these large price movements. We also check whether these moves indicate buying opportunity for these stocks going forward.

 

Fine Organics rises 9.41% owing to exceptional performance in Q4FY22

Fine Organics established in 1970, is a leading company in the specialty additives industry and is a leading producer of specialty additives for foods, plastics, rubbers, paints, inks, cosmetics and so on.

It recently released results for Q4FY22, reporting a 283.3% increase in net profits to Rs 121.85 crore from Rs 31.79 crore in Q4FY21. Even revenue from operations climbed by 91.1 % to Rs 616.87 crore in Q4FY22, up from Rs 322.88 crore in the previous quarter. In FY22, the company recorded 115.8% increase in net profits and 65.6% increase in revenues on a consolidated basis. The company’s share price has risen 9.41% in the last month because of its outstanding growth and financials.

Given the strong level of investor optimism and expanding demand, investors should expect up moves in the coming sessions.

 

Fine Organics rises 9.41% owing to exceptional performance in Q4FY22

ABB INDIA reported 2-fold jump in net profits in Q4FY22

ABB India is one of the world’s leading engineering companies helping customers to use industrial power effectively and to increase industrial productivity in a sustainable way.

The stock price jumped 18.31% last month and is now down 1.52% from its 52-week high. The price increased last month on the announcement of its financials with net profit at Rs 370 crore in Q4FY22. This was a twofold jump as compared to last year mainly on the back of higher revenues, indicating that it has maintained its stable financial performance with robust sales and earnings growth.

On the technical charts it has broken out of a three-week narrow consolidation with high volumes. In all time periods, higher peaks and higher bottoms have been observed, with the 50-day EMA above the 100-day and 200-day EMAs, indicating a bullish trend. Furthermore, the capital goods sector has begun to outperform, indicating that the optimistic trend will continue.

Existing investors can keep their positions, while new investors can consider investing with a target of Rs 2620+ in the next three months and a stoploss of Rs 2150.

 

ABB INDIA reported 2-fold jump in net profits in Q4FY22

TimKen India jumped 18.72% with profit after tax tripling in Q4FY22

Timken India, founded in 1996, is a Mid Cap firm in the Engineering industry, with core products and revenue segments such as Bearing Accessories & Maintenance Products, Sale of Services etc.

Timken India’s stock jumped 18.72% last month as the business reported outstanding earnings, with profit after tax (PAT) more than tripling to Rs 12.13 crore in Q4FY22, thanks to strong operational results.

With consistent margins, new product introductions and improved performance in the Indian CV & PV area, Timken is projected to do well in the future. As 50 days EMA line is above 100 and 200 days line showing bullishness, long-term investors should expect a 20-25% return with a one year period due to excellent financials and bullish momentum.

 

Timken India jumped 18.72% with profit after tax tripling in Q4FY22

Adani Green witnesses a sharp fall as overvaluation bubble bursts

Adani Green Energy Limited (AGEL) is one of the largest renewable energy companies in India, with a current project portfolio of 20,284 MW.

The Indian government announced in March 2022 that renewable energy capacity will be increased to 500 Gigawatts by 2030, and significant businesses opted to invest in it, with Adani Green emerging as one of them. As Adani Green decided to invest in renewable energy with an aim to create 25 GW of Renewable energy projects by 2025, it caused the stock to rise by more than 50% in 18 days in April 2022, resulting in the formation of a bubble. In May 2022 that bubble of overvaluation burst due to future concerns and Adani Green started to plummet with practically all green energy companies seeing their charts turn red.

Adani Green dropped 35.40% in May due to its overvaluation, with a PE multiple of 600, a PB of 157, and a five-year losing streak. For investors, the best strategy is to wait for further movements before taking any positions and search for a possible trend reversal.

 

Adani Green witnesses a sharp fall as overvaluation bubble bursts

High inflation and weak consumption demand cause a drop in Shree Cements

Shree Cement Limited is one of India’s top three cement producers with its products meeting the requirements of different customer segments be it OPC, bag packing or loose cement in bulkers. It has underperformed the NIFTY 50 in the last month, falling 15.98% while the NIFTY 50 has only declined 3.51%.

It has been in a bearish long-term trend, with the current price trading below all short, medium, and long-term moving averages. It is 30.4% off its 52-week high and only 5.4% off its 52-week low, with no signs of a trend reversal in sight.

The reason for the same is slowing profits due to headwinds of high inflation and weak consumption demand. The cement industry’s operational performance over the past few quarters has been broadly affected by rising prices of coal and fuel, and the inability to fully pass on higher costs to consumers. Due to this leading cement stocks like Ambuja Cements, ACC and Shree Cements have shown lackluster performance over the past few quarters. Investors should stay on alert as this stock has been in a bearish trend for a very long time with no signs of likely revival anytime soon.

 

High inflation and weak consumption demand cause a drop in Shree Cements

Identification of fraud makes Can Fin Homes lose 19.23% in a month

Can Fin Homes Ltd., a Housing Finance Company promoted by Canara Bank, was established in 1987 and lends to middle income households.

Can Fin Homes is currently experiencing a negative trend, having dropped 19.23% in May. According to a press release issued in May, RBI may investigate the identification of fraud in 37 Can Fin Homes accounts, which caused the stock to drop 14% intra-day on May 9^th.

Canara bank’s internal investigation discovered that 37 accounts in one branch had bogus ITRs (income tax returns). They classed them as non-performing assets (NPAs) after declaring them to be fraudulent (non-performing assets). All this shifted market sentiment, resulting in a significant price drop in May.

As 50 days EMA line is quite below 100 and 200 days EMA line, investors should stay away from this stock for the time being.

 

Identification of fraud makes Can Fin Homes lose 19.23% in a month

Vedanta turned Ex-Dividend and fell nearly 22% despite strong financials

Vedanta is an Indian multinational mining company headquartered in Mumbai, with its main operations in iron ore, gold and aluminum mines in Goa, Karnataka, Rajasthan and Odisha.

Vedanta was on the rise before plummeting 22% in May. With strong financials, YoY revenue and profit growth, as well as a three-fold interim dividend declared in FY22, the stock has soared only to plummet now. The stock turned ex-dividend in May as Rs. 31.5 per share interim dividend was announced for FY23 with 9^th May as record date.

Despite this fall, Vedanta has strong financials and is expected to invest roughly $20 billion to grow its present business lines as well as venture into new verticals like semiconductor production. The fall was temporary and currently the stock is trading at a solid support level of Rs 287. Traders can wait for a breakout candle with high volume and can look for a probable up move in near future.

 

Vedanta turned Ex-Dividend and fell nearly 22% despite strong financials

Nestle may offer a buying opportunity in coming weeks

Nestlé India is the Indian subsidiary of Nestlé which is a Swiss multinational company and is a significant name in the FMCG industry. The stock price fell 12.72% in mid-May to hit a 52-week low, then rose 9.23% by end of the May and is now trading at 4.66% lower than last month.

The dynamic character of the FMCG sector appears to be the reason for such a long period of decline and resurgence. When compared to short, medium and long term moving averages, the stock now has a mid-range momentum. Investors can take a neutral approach for the time being and re-evaluate their position after the next quarter’s results are released or if there are any significant sectoral moves.

 

Nestle may offer a buying opportunity in coming weeks