How to use the Promoter Buying scanner?
This scanner gives you lists of large and mid-cap Indian stocks where promoters have increased their stakes for two consecutive quarters.
Let’s learn more about the filters used:
Market Capitalization
For this strategy, we will be sticking to large & mid-cap stocks, for which we will look for stocks having a market capitalization of more than 10,000 crores. If you want to consider small-cap stocks as well, you can use a market capitalization filter of more than 5,000 crores. We have not included a small-cap search as we believe that the reliability of data on smaller companies is somewhat susceptible and they are more risky.
Promoters Holdings
This refers to the percentage of company shares held by its founders or owners. A high promoter holding percentage signifies confidence in the business, aligning interests with management. It suggests stability as well, indicating the promoter’s confidence in the business. In this scanner, we select companies where promoters are increasing their stake for two consecutive quarters because it indicates that the founders or management of the company have sustained confidence in the company’s performance and prospects. This trend often implies positive developments or potential growth opportunities, fostering investor trust and a potential increase in the stock price.
By using the above filters for the scanner, we have obtained a list of large and mid-cap Indian stocks where promoters have increased their stakes for two consecutive quarters, suggesting a potentially new leg of growth in the company and stock price.
Example Trade
This scanner gave the name on stock Zydus Wellness Ltd. on 1st April 2024 as promoters increased their stakes for two consecutive quarters. From 1st April 2024 to 25th June 2024 this stock gave a return of more than 34% in just 3 months.
Don’t forget
- This is a first-level filter aimed to give you a good starting point in your search for the lists of large and mid-cap Indian stocks showing increasing promoter interest. You need to analyze the valuation, financial strength, and management quality among other aspects to ascertain if they are good businesses and command a seat in your investing portfolio.
- Excessively high holding might raise concerns of limited liquidity or governance issues.
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How to Invest for Long Term
by Arvind Kothari
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Company Valuation Analysis
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Frequently Asked Questions
Should I just buy every stock where a promoter is increasing their stake?
No! This scanner is just to be used for idea generation. As mentioned in the ‘Don’t Forget’ section, this is just a first-level filter aimed to give you a starting point in your search for fundamentally strong companies available at low valuations. You can learn more about long term investing in Mr. Arvind Kothari’s How to Pick Stocks for Long Term course on Upsurge.club.
How can I learn more about investing in the right stocks?
Upsurge.club offers a range of courses on investing where you can learn everything from the basics to advanced strategies and idea generation methods. You can find them here.