NMDC is a great buy at these prices. It has corrected nearly 40% From 160, not due to its performance but instead due to subdued and declining metal & oil pricings. Since Infrastructural growth which is one of the prime focuses of the BJP / Modi led Govt. , we anticipate a sudden knee jerk reaction which will shoot NMDC upwards very so suddenly taking the stock price upwards. With NMDC dropping 5% weekly, NMDC’s dividend Yield continues to grow higher, and from past dividend payouts we continue to have confidence that share holders will be rewarded in the long run. However, we also need to be aware that last year’s high payout was due to Congress requiring funds to cover Govt. costs and almost all Govt. companies were forced to payout larger dividends – which may not repeat this year. Keeping that also in mind, we continue to feel NMDC is a great company with a large potential and though it may be showing a downward stock movement, it automatically becomes a hidden gem for us. As a long term investment and anticipating good dividends ahead – we continue to maintain this as a buy.
-Written by Shivam Parikh