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The first-rule of trading, which everyone tries to-follow or implement, is to buy at-a-lower price and sell at a higher price. But this is easier said than done. It is difficult to
time the market, which means it is hard to predict the bottom or top of the market. The same rule applies to stocks as well. To make the job simpler, Morgan
Stanley in a recent strategy report highlighted 13 stocks in which growth is available at reasonable prices. At a time when most companies are struggling to show a consistent growth track
record, these 13 stocks are priced to perfection at current levels in comparison to their return on capital employed (RoCE). However, one should note that these are not 'buy or sell'
recommendations from the global investment bank. The list includes companies like Asian Paints, BPCL, Dabur India, Godrej Consumer Products, Havells India, India Oil Corporation, Infosys, ITC, JSW Steel, Petronet LNG &
Mphasis. Why is growth, EPS or RoCE so important? Growth is a predominant factor why the stock price of a company rises or falls. This is the untold truth of the
market. At the same time, efficiency of capital is equally important, which is measured by calculating RoCE. Theory suggests that earnings per share is the portion of a company's distributable profit
allocated to each outstanding share of common stock. "Generally, any company with more than 15 percent EPS is considered to be a great investment bet. If the RoCE of the company
also supports EPS, then the company will offer better returns," Ritesh Ashar, Chief Strategy Officer at KIFS Trade Capital, said. The second most important factor is efficiency, which is measured by
capturing RoCE. Thus, a growing company with higher RoCE is a great recipe for identifying wealth-creating companies. Theoretically, RoCE is a profitability ratio, which is used to find out how efficient
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