Public sector enterprises offer a good contrarian investment opportunity in the current market scenario, according to Parag Thakkar.
“PSU stocks are completely beaten down, they offer huge value. Most of them are not leveraged at all. In fact, they are net-cash balance sheets. Dividend yields are in excess of 4-5%. And now, they are doing buybacks,” the portfolio manager at ICICI Prudential Asset Management Co., which had average assets under management of Rs 3.6 lakh crore in the July-September period, said in an interview with BloombergQuint's Niraj Shah.
And it's not just PSUs, but Thakkar also changed his stance on cyclical stocks after the Indian economy opened up on easing lockdown curbs.
“When we went into the Covid-19 lockdown, we were underweight financials and overweight pharma and FMCG,” he said. “As unlock started to happen, we changed our guard and increased our weight in cyclicals, whether it's cement, auto or financials.”
He, however, advised investors to hold on to any good-quality information technology, fast-moving consumer goods, pharmaceutical or telecom stocks in their portfolios as they are “recurring themes” for long-term investments.
Watch the full interview here:
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