New seven wonders of the stock market

One of the many reasons why every investor should read Wealth Insight is that apart from the extensive data, critical advice and xpert insight thatmake up the magazine, we also try to put forth investment worthy ideasthat can be evaluated and implemented y you - the investor. Last month,we told you about the stocks that fund managers bought when the marketswere crashing; our nalysis threw up nine tough stocks for a tough market.

Thistime around, we`ll tell you which stocks reported a smart recovery in the past two quarters. But first our modus operandi. We began with all the 6215 listed Indian companies.Out of these, we selected the top 1000 companies on the basis of market capitalization (30-days average, as on 14 May, 2008) and ran a query on 545 of them which had declared their fourth quarter numbers for FY2008. This list was further filtered to find those companies, which had been struggling since December 2006 but had staged a recovery a year later - December 2007 onwards.

To find these companies, we evaluated the EPS of each company over the pastfive quarters. EPS gives you the amount of company`s profits that areattributable to each outstanding equity share and is obtained by dividingthe net profit figure (excluding preference dividends) by the number ofoutstanding shares.

Afterevaluating the EPS, we found that there were 21 companies that had seena constant decline in EPS from December 2006 to September 2007. But outof these 21, seven companies have been able to bounce back in the pasttwo quarters of December 2007 and March 2008. These seven companies havereported a significant earnings turnaround and consecutive growth in EPS.These companies have obviously done something right and would probablymake a good investment. So let`s take a close look at each of them… Text : Also See: 9 gems for a tough market | Where to invest now | More slideshows