It has made to headlines many times, one sector which is facing the brunt of selling from FPI, no prize for guessing it. It is financial services, stocks including banks. When a sector comes under pressure due to selling by one set of investors then sometimes, a narrative gets created that every stock in that sector should be avoided. But the fact if the fundamental of that sector are intact and improving, these phases of selling are probably an opportunity. Now the question comes which stock should be looked in and how much more should be paid for the stock. One of the ways is to determine by dividing a company’s PE multiple with its growth ratio. Look carefully at PEG ratio which in the long-term indicates many things in a better manner than most other alternatives like PE which tend to create a mirage of value.
