This is a first of a what I hope will be a long running tradition: Stock Picks of the Week. Almost like a weekly stock roundup, this section will be a list of my stock picks based on fundamentals, intrinsic value and future growth outlooks. These posts may feature 5 picks, sometimes 3, and many times might not feature any at all, but the ones that do indeed make the cut have a high chance of strengthening and growing your portfolio. Here are my stock picks of the week:

Infosys

My first pick of the week is Infosys. Picking a stock like Infosys shows exactly what I talked about in our previous blog: Capitalising on quarterly results. (you can find the link to said blog here :- https://bullishbehaviour.com/capitalizing-on-quarterly-results/) Infosys released their Q4 results earlier this week, and much to the discontentment of its shareholders, disclosed highly stunted growth guidelines and estimates for FY24. I must admit, the statement was not great to hear, but this is where we must use second level thinking. Yes, the FY24 financial performance of Infosys will likely not be great, but I believe it will be much better than people expect it to be, and that will lift the stock price. In my opinion, the management of Infosys is arguably one of the best in the world. Under the leadership of their CEO and chairmen, especially Narayana Murthy, I feel Infosys will be able to muster a decent financial year. Now, future outlook aside, Infosys has great fundamentals. Me saying its ratios are good is an understatement. Infosys has generated a high growing cash flow and has used its money well, shown by its astoundingly good ROCE and ROE and zero net debt. Apart from fundamentals, being a self-proclaimed value investor, intrinsic value is also something I strongly rely on to find good investments. (I will talk about Intrinsic value and value investing in a later blog, you can learn more by reading Monish Pabrai’s “The Dhandho Investor,” which gave me great insights on intrinsic value and its use. You can find it here :- https://amzn.to/3HkQQtk)The intrinsic value of Infosys shows an upside of more than 50%, which again points out that Infosys is a STRONG BUY.

HDFC Bank

My second pick of the week is HDFC Bank. HDFC Bank is a type of stock which is commonly referred to as a “consistent compounder.” For decades, it has shown groundbreaking profit, revenue and deposit growth all the while having extremely low Non Performing Assets. This quarter it has been no different, with the bank posting decent year end results. However, HDFC Bank’s excellent fundamentals, although obviously a factor, are not the main reason for my selection of its stock. With the HDFC and HDFC Bank’s mega merger finally approved from all parties and expected to take place in July, there is heavy speculation on the two organisations’ stocks. I feel this is the perfect time to use second level thinking and take advantage of the speculation built upon HDFC Bank’s stock and buy it. With the excellent management of HDFC and HDFC Bank, their merger should be able to go through without any major issues despite conjecture. The current speculation of HDFC Bank’s stock, along with its great fundamentals and huge discount to intrinsic value, I believe it is also a STRONG BUY.

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