Stocks like Sadhana Nitro Chem, Choice International, Vishal Fabrics and Gujarat Mineral Development have gone up by 47-60 percent in the last week, Good Returns reported. Riding on the bandwagon can prove dangerous. Take the case of Sadhana Nitro Chem. The first quarter EPS was just Rs 0.17. For the last 2-years, the company has not paid any dividends. 

Now to pay Rs 111 for a company, where we are not so sure that profitability would sustain, is not a good idea, the report said We could not see dividends for Choice International either for the last few days. 

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By and large, it seems that there has been speculative interest in some of these stocks, the report said. “Avoid over-exuberance and hearsay. In general, even some of the fundamentally sound companies have become increasingly expensive. Our general take on the market is that they have become expensive and investors need to be careful. Finding value in this market has become difficult, given that liquidity continues to drive the markets”, the report said.

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