Dhirendra Kumar talks about how a stock makes it to the recommendation list and why Wealth Insight should not be considered a recommendation platform
Why does a stock exit your Best Buy Now list? For instance, there was a real estate stock added to the Best Buy Now list in March and now it has been removed. Also, there were some good companies mentioned on various issues of Wealth Insight but they are not there on your recommendation list. Is it because they are over-valued?
When it comes to a stock entering or exiting our Best Buy Now list, I and our equity analysts sit together and debate intensely about all the companies that are there on the list. While some analysts talk in favour of a company and why it should be on the list, others may oppose the same and after brainstorming, we come to a conclusion. The Best Buy Now list contains companies that look most attractively priced and without any near-term concern. Thus, while Stock Advisor has about 40 recommendations at a time, we tend to keep our Best Buy Now list limited to a maximum of 15 companies. Since investors look for an abridged list as they can't invest in all the 40 companies in our recommendation, we come up with the Best Buy Now list. We keep reviewing our Best Buy Now list continuously and check whether any other company may seem attractive and can make it to that list.
The real estate company that you are referring to has been removed from our Best Buy Now list. Nevertheless, it still remains a part of our Stock Advisor recommendation list as we believe that it is a great company and we are still very upbeat about that. In the nasty world of the real estate sector, a handful of companies are worth looking at. The company that is part of our recommendation list is a small company which we think is very attractively priced. However, the outlook for the real estate sector, in general, is not that bright.
Now, I am coming to your second question about why companies featured on our Wealth Insight magazine are not a part of our recommendation list. Wealth Insight for us is not a recommendation medium, rather here we bring forward a lot of analytical stories based on facts. We do not talk about things like speculative stocks, momentum stocks or provide details about the technical analysis of any stocks in the magazine. Through Wealth Insight, we also don't intend to provide any near-term outlook for the market. Rather, through this magazine, we aim to provide you with thought-provoking articles that may help you build up your own understanding of companies, sectors, etc. If you find something attractive, dig into those companies and buy those stocks. However, we don't use it as a medium for recommending stocks to investors. This is because when we recommend a stock, we believe that it is our responsibility to tell investors if something significant happens to the company which leads to a substantial drop or rise in its prices and for this, Stock Advisor is a better medium. We also tell our subscribers when to exit a stock. If we come across a situation that makes the company lose its charm such as something unpleasant about the management or the company or something that has happened to the sector or the outlook becomes very grim from the time when we recommended it, we change our mind and that is when we actually make a sell recommendation. We have had a couple of sell recommendations in the past, most of which were primarily driven by fundamental changes in companies. Since Wealth Insight does not provide any update on companies, don't consider it as a recommendation service. Rather use the information provided on the magazine to do more research on companies that you may like and build your conviction about those companies.