I received through email a report from a highly reputed name - Forbes. Take a peek:
While I don't have a clue about other stocks mentioned in this report, I certainly know something about one of the recommended names - Infosys.
At the outset, let me declare in no uncertain terms the following:
- I'm a big fan of Infosys
- Do have investments in Infosys
- Do regard Infosys to be a great company
- Do hold its management in high esteem on parameters like Corporate Governance, Efficiency, Cost-consciousness, Customer-orientation, etc.
Having stated all the above, let me get to the main point - I'm deeply disappointed by Forbes recommending Infosys. Reasons are plenty. Some of them:
- Infosys is a highly discovered story - At least in India, virtually every Ram, Krish and Hari knows about Infosys
- Infosys is an extremely old story
- Infosys is a great company, but perhaps not a great stock, especially considering the kind of other opportunities available in the Indian stock markets.
- Infosys is quoting at a PE of around 23 - Its EPS is expected to grow at around 17% per annum in the next 5 years - How much more can its share prices zoom further?
Even more interestingly, if Forbes' top 5 BRIC Stocks recommended includes Infosys, one can very well imagine the quality of the other four shares recommended in this report.
Morals of the story:
- Infosys is a great name - I love the company
- Forbes is a great magazine - I respect the magazine
- But do I depend on Forbes to determine my stock picks??? Certainly, I wouldn't
On the contrary, I'll much rather prefer to do my own research and come to my own conclusions.
What about you?