What is your top stock recommendation? In the next 2 to 3 years, where do you foresee a 30-40% increase in value? I am open to considering companies of any market capitalization – midcap, largecap, smallcap, you can choose. If you are seeking my opinion for the next few years, one sector we are very positive about is industrial equipment and within the leading industrial equipment companies, both ABB and Siemens have shown strong performance.
They are at the heart of whether it is, you can say, energy change, digitalization, data centers. So this whole area appears very captivating. However, specifically, in the upcoming few years, Siemens and ABB catch our attention.
Market experts says
We are extremely positive about capital goods firms and among the leading capital goods firms, ABB and Siemens. Additionally, when it comes to emerging technology stocks, profitability will ultimately be the benchmark and there is a fair expectation that a few of these companies will become profitable, perhaps within the next few years.
Some chosen stocks have declined from their peak levels. What is your perspective regarding Paytm, Zomato, innovative technology firms, and the reasoning behind investing in them? In recent years, the modern companies have experienced significant correction from their previous highs. Additionally, their business models are becoming more developed. These companies have also recognized the challenges they may face and understand that they cannot sustain continuous losses indefinitely. Another aspect to consider is that when these modern technology companies were listed, their valuations were influenced by the situation in the United States, especially regarding the valuation of technology stocks.
The leading 10 to 20 companies in the US technology sector have experienced a significant surge in the past half-year, and a few of the shares have actually risen by 50% to 80% from their lowest point. Therefore, it is not just the underlying qualities of American tech firms listed on the stock market that are reflected in their stock prices, but also the increase in the prices of technology stocks in the US, which is the biggest market for such shares.
In the foreseeable future, a few of these stocks will find stability, their business strategy will develop and in the following five to seven years, they can produce a substantial amount of profit and return for the stakeholders. Nevertheless, in the next few years, it will be a significant trial to see how these firms adapt to the constantly evolving circumstances, become profitable, and what level of profitability they achieve because in any sector; in the long run, one cannot consistently evaluate anything based on EV by sales or market cap to GMV sales or something similar.
In the foreseeable future, profitability is going to be the benchmark and that is where some of these companies have now begun concentrating and there is a reasonable expectation that some of these companies will become profitable perhaps within the next few years.