Published On: Sat, May 13th, 2017

Stuck with these laggards? 10 stocks which slipped up to 66% in 2017

Stuck with these laggards? 10 stocks which slipped up to 66% in 2017

The S&P BSE Sensex rallied over 13 percent so far in 2017 while there are close to 400 stocks across categories which have given negative returns in the same period.

For simplification, we have collated a list of top ten stocks which include names like JMT Auto, MT Educare, Shilpi Cable, McNally Bharat, Nitin Fire, GOL Offshore, Mandhana Industries, KMSugar Mills, KSK Energy, and IOL Chemicals.

Indian markets experience huge liquidity gush which has taken many stocks higher despite muted fundamentals but these stocks have a different story to tell.

The Nifty, which rallied nearly 15 percent so far in 2017 hit a fresh record high of 9,450.65 this week. At a time when there is bullish sentiment, underperformance by stocks could be taken as a sign of caution.

“Most of the stocks which have underperformed so far in the year 2017 are sketchy in terms of volumes and in many cases the average daily turnover is below Rs 1 crore, giving rise to negligible transactions,” Pushkaraj Sham Kanitkar, AVP – Technical Research at GEPL Capital told Moneycontrol. Secondly, the prices have remained in an extended downtrend even lasting over 2 odd years.

Liquidity is an important aspect of trading. Time and again analysts have raised caution towards illiquid stocks which may be easy to get into but difficult to get out of.

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Illiquid stocks pose a higher risk to investors as they cannot be sold easily because they see limited trading. It is difficult to find buyers for them as compared to frequently traded shares.

According to the BSE, a stock is termed illiquid when average daily turnover is less than Rs 2 lakh calculated for previous two-quarters, and the security is classified as illiquid at all exchanges where it is traded.

We spoke to few analysts on what should investors do if they are holding these stocks:

[Source”cnbc”]