Good businesses facing tough times could be value buys for long term
These business tend to tide over temporary unfavourable phases.
When short-term events trigger a fall in the share price of good businesses, it makes sense to enhance exposure to such stocks. Even if such companies are trading at slightly expensive valuations than their historical averages, it makes sense to be invested in these counters. A key reason being in the long-term (at least three years) such businesses, which have survived long cycles, tend to tide over temporary unfavourable phases.
Based on relatively attractive valuation — current price-toearnings multiple trading below five-year average price to P/E — and high prospects of stable and sustained earnings, ET Intelligence Group culled out a couple of good businesses from the BSE 100 index which are going through a bad phase.