Top Ten High Beta Stocks

Investors usually will notice the fact that despite the broader indices moving higher their stock does not rise in tandem or vice-versa. This could be on the back of the fundamentals or technicals of the stocks which an investor holds. However, one of the other important factors that one should look at is the beta of the stock. Beta is a number which describes the movement or volatility of that stock in comparison to the broader indices.

For example, if a stock has a beta of 1 then its movement is almost similar to that of the Sensex, while in case it is greater than 1 (for instance, 2) then it gives around two times the return than the broader indices. Similarly if the stock’s beta is less than 1 (say 0.5) then it will inch higher by approximately 50 per cent less than that of the broader indices. Here one should note that stocks having beta greater than zero usually move in the direction of the broader market i.e. if the market inches higher, the stock also goes up and vice-versa.

Investors should further note that there are stocks which have negative beta and in that case the direction of the stock is completely opposite to that of the broader indices. This time we at Dalal Street Investment Journal have identified a list of stocks which have high beta and also more volatility in the share price, thus helping the investors to gain or lose more. High beta stocks are traders’ favourite as the nature of high movement helps them to make quick bucks.

GVK Power & Infrastructure

GVK is an Indian conglomerate having interests in diversified businesses like energy, resources, airports, transportation, hospitality and life sciences. It has already invested over Rs 15,000 crore in these businesses and has projects worth over another Rs 30,000 crore in the pipeline. GVK has acquired the Hancock Coal Mines in Australia. It is also developing and managing two airports in Mumbai and Bangalore. GVK also has road projects of over 2,200 lane km under construction and development. The scrip has given 30 per cent return on a YTD basis this year. The beta of the stock is 2.47.

SREI Infrastructure Finance

SREI Infrastructure Finance Ltd (SREI IFL) is one of India’s leading non-banking financial institutions (NBFI) and the only private sector infrastructure financing NBFI. The company is into the financing of infrastructure equipment, infrastructure projects, infrastructure development and advisory in all verticals of infrastructure-related activities. It also offers other financial services like capital market services, insurance broking and venture capital. The company has a strong national presence with a network of 63 offices and has expanded internationally also. The beta of the stock stands at 2.4.

Punj Lloyd

Based in Gurgaon, the Punj Lloyd Group is a diversified international conglomerate that offers EPC services in the energy and infrastructure segments along with engineering and manufacturing capabilities in the defense sector. The company also has a presence in the overseas markets like Hong Kong, Turkmenistan, Middle East, Thailand, etc. It has a strong relationship with its global clients and an order book in excess of Rs 27,000 crore. The shares of the company have yielded returns of 21 per cent on a YTD basis. It has a beta value of 2.37.

Hindustan Oil Exploration Company

Hindustan Oil Exploration Company Ltd is into the exploration and production of hydrocarbons crude oil and natural gas, which are natural resources. HOEC was the first private company in India to enter into the field of oil and gas exploration. The company provides geological and geophysical services relating to the exploration of oil and natural gas and other oil field services. The company has a participating interest in nine oil/gas fields in India which are in varying stages of the E&P lifecycle i.e. exploration, development and production. On a YTD basis the stock has given a whopping return of around 41 per cent. The beta of the stock stands at 2.34.

Sterlite Technologies

Sterlite Technologies is a leading global provider of transmission solutions for the power and telecom industries. It has a product portfolio which includes power conductors, optical fibers, telecommunication cables and a comprehensive telecom systems / solutions portfolio. Sterlite’s vision is to ‘connect every home on the planet’. Sterlite is also executing multi-million dollar power transmission system projects, pan-India. On a YTD basis the stock has appreciated by around 8 per cent. The beta of the stocks stands at 2.15.

HDIL

Housing Development and Infrastructure Limited (HDIL) is one of India’s largest real estate developers. It has carried out numerous residential and land development projects. The firm is also involved in slum rehabilitation and development of commercial and retail projects. The return it has yielded to date is 58.91 per cent. The reason for this high yield is because the company was trading at a 52-week low of 52.1 on January 2, 2012. Its beta stands at 2.42.

Reliance Infra

Reliance Infra is an ADAG Group company having interests in various businesses. It is also India’s leading electricity utility company with a presence in generation, transmission, distribution, EPC and power trading. It is also developing projects in all high-growth areas in the infrastructure sector i.e. roads, highways, metro rails, airports and specialty real estate. The stock is up by 60 per cent on an YTD basis and the beta of the stock is 2.29.

HCC

Hindustan Construction Company (HCC) is an infrastructure company involved in high-value construction projects segments like transportation, power, marine, utilities and urban infrastructure. HCC has been involved in the Lavasa project which saw a great deal of time in getting clearances from the environment ministry. The company reported this week that it would restructure its debt worth Rs 4,150 crore instead of Rs 7,600 crore as stated earlier. HCC’s beta is 1.90 and has gained 16.02 per cent YTD. It is currently trading at Rs 19.55.

IVRCL

IVRCL is a leading player in infrastructure development in India. The company started commercial operations in 1990 and now it has established itself as a premier EPC and lump sum turnkey contract service provider. IVRCL operates in segments like water & environment, transportation, buildings and power. Its clients include some of the biggest industrial names such as BHEL, BPCL, ONGC, PowerGrid Corporation of India, etc. The stock has given returns of 81 per cent in this year alone and the beta of the stock is 2.26.

Voltas

A Tata Group enterprise, Voltas has managed to take a position in our list of high beta stocks. Voltas offers engineering solutions to various industries in areas like heating, ventilation & air-conditioning, refrigeration, electro-mechanical projects, textile machinery, machine tools, mining and construction equipment, materials handling, water management, etc. The company has various subsidiaries and joint ventures in domestic as well as the overseas market. The company’s core capabilities are certified under ISO 9001:2000. It has executed projects in over 30 countries worldwide. On a YTD basis the stock has given a return of around 40 per cent. The Beta of the stock stands at 2.21.