Select commodity stocks look good on valuation: Deven Choksey

In a chat with ET Now, Deven Choksey, MD, K R Choksey Securities, share shis views on the commodity space.

ET Now: Infrastructure, real estate, commodities, all being taken to the cleaners in today’s session at least. What would you do here with any of these pockets? I know you have a keen eye out for commodity names as well. Do you think there is more pressure considering that it seems to be a lot global in nature as well?

Deven Choksey: To an extent, yes. I do not have a clear answer to it as to how much pressure it would have but the fact is that most of the commodity companies, the valuation at which they are quoting currently, they are giving me a comfort on the downside because the margin of safety that they are offering in the downside is huge. Maybe it may take time for them to probably show the kind of an appreciation or upside but largely it is dependent on the global factors which I mentioned earlier. That is where one would probably keep an eye on. If those sectors start turning positive and I am relatively talking about some amount of stability with a volatility into different asset classes including into the currencies also. If that does happen, then in such situation, the confidence to go along with the commodity would really emerge stronger in this market. At this point of time, I do believe that at least select commodity stocks certainly demands consideration in adding into the portfolio. Considering the fact that there is a lag of around three to six months before which they will start performing and giving better results, one could possibly start accumulating in every fall. Such commodity companies are definitely looking interesting at this point of time given the valuation and the fundamental strength on which they are operating currently.