Thursday, July 04, 2013

The Potential of India Stocks

With many countries still in recession and the global economy still showing little sign of recovery, investing in the stock market is causing many people sleepless nights. Fortunes have been lost on the US stock market in the last few years and Wall Street is still very cautious.
Of course there is still a lot of money waiting to be invested - people are looking to diversify their portfolio and American investors are keen start seeing dividends again. There is one region which has suffered due to this economic downturn and that's Asia. And one of the leading Asian economies is India. Although the S&P 500 is up about 18% during the last twelve months, Indian shares have dropped approximately 7%. Maybe it's time for a turnaround.
India's economy has been experiencing unprecedented growth in recent decades and that growth is showing no sign of slowing down any time soon, over a long term time frame.
That economic growth has been accompanied by some spectacularly good performances in India's growing number world class companies and many of these companies are now household names in the West. According to, there are over 15 Indian stocks that trade in the United States. ArcelorMittal, Tata, Infosys, Reliance Industries and ICICI Bank are just a handful worth mentioning and there are a lot more which may experience growth stories.
ArcelorMittal (MT), which trades on the New York Stock Exchange, is a major integrated steel and mining company. The stock trades at nine times forward earnings and pays a 6.1% yield. Dividends have been paid quarterly.
The India based Tata Motors Limited (TTM) trades at six times forward earnings and pays a small dividend rate of 0.7%
Infosys Ltd. (INFY) is a business and technology consulting company, which has a forward price to earnings ratio of 13 and a yield of 2.3%.
India is now far more than a developing nation - it is the most influential country in the region and is becoming a key player on the world stage. With hundreds of millions of India's population about to make that important transition into the middle classes there is a rising tide of demand domestically for products and services and this is, in turn driving India's expansion into the global marketplace, including services, technology, and manufacturing.
Coupled with India's rising demand for minerals and metal resources, India has some truly great companies which are showcasing themselves right now. And all of this means one very important thing for American investors right now - investment opportunities. They have solid, safe, secure and stable investment opportunities.
India is currently producing more billionaires than any Western country and these are the guys who are leading these companies. Many of them are by now familiar names on the New York Stock Exchange and NASDAQ, and it is a great time to acquire stock in Indian corporations.
With hindsight, anyone who had invested in even one of India's new stock giants just 20 years ago would be sitting on a very healthy profit by now. Hindsight unfortunately isn't much use in the investment world. Foresight however, is. Anyone who sees the growing opportunities available to invest in Indian based stocks today could be looking back in another decade with a big smile on their face.
For a free list of Indian stocks, go to
Disclosure: Author didn't own any of the above at the time the article was written.

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