Monday, April 25, 2011

blue chip stocks

Blue chip stocks

Almost everyone who is remotely interested in investing in the stock market must have seen a list of examples of so called best or top blue chip stocks.

The price volatility of so called blue chip stocks which are recommended for long term portfolios are assumed to be lower than other stocks. But some of the so called blue chips like Maruti Suzuki, Infosys technologies etc have crashed by 10% or even more recently.

The PE (price to earning) ratios of
so called blue chip stocks are usually much more higher than other stocks. So any hint of slow growth in earnings, or any negative news on the management front seem to send these stocks (or for that matter any stock) into a tailspin.

The dividend yield of some of these so called blue chip stocks like bharti airtel are also very very low. Some time back, the stock had fallen a lot when per second billing was introduced, and also when it was acquiring Zain in Africa.

It is quite interesting to see the dividend yield of some of the so called best blue chip stocks.

Another stock like NTPC has fallen off a lot following the FPO offering.

Some of the stocks like ONGC have shown a lot of zig zag motion with news of the FPO offering.

Some stocks like SBI etc have started to go back after a big fall during the time when rates were going up with high inflation though it is not clear if the upmove can be sustained.







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