10 Ways to Identify Multibagger Stocks For Investment
If you are investing you must be thinking about the investment on your returns, every investor wants to get multi fold returns on his investment. So what is best way to get multi fold return on your investment ?
Investment in IPO could be one of the option ( if you are lucky to get shares allotted ) or best mutual funds from small or mid cap; but I would say investment in the right stock which have potential to give multi fold return in near future is the right choice. In technical terms this is called as Multibagger Stock. A good multi-bagger stock can make you wealthy. However, it is difficult to identify good multibagger stocks for investment. Investors are always looking for a method to identify good multibagger stock for investment.
In this post, I will share a method to identify good multibagger stock for investment. Along with that, I will also share 5 Multibagger Stocks that have generated multi fold returns for the investor.
What is Multibagger Stock ?As explained above the multibagger stock has potential to multi fold your money in coming years. A multibagger stock is a financial jargon used for a stock that gives a return of more than 100%.
Based on how many fold return it gave it is called either
- 2-bagger —- 100% returns
- 3-bagger —- 200% returns
- 4-bagger —- 300% returns
- 5-bagger —- 400% returns
- 10-bagger—- 900% returns & So On
How to Identify Multibagger Stocks?Now we'll see how you can identify the right stocks that will multi fold your money in stock market.
- The management of a company should be highly committed and able to take the company to new heights.
- The Company should have low debt or be debt-free.
- A company should be preferably in mid-cap and small cap area.
- You can check if company is operating in a space where they are delivering unique product or services.
- The demand for products and/or services must be high and competition should be low.
- The historical performance of company should be good.
- The company should have a good source of earning with scalability in operation.
- The company business model should be sustainable and should have favorable future business potential.
- The valuation of stock should be low.
- Business expansion, a global market presence or new monopoly product could be added advantage.
If you consider above points and choose your stock accordingly then you'll too join in the list of investors who have able to multifold their investment in multibagger stocks.
Below are some of the multibagger stocks which have provided good returns to its investors in last 5 years.
1. Avanti FeedsAvanti Feeds is from Aqua culture sector. A stock has grown by 67 times since past five years. Investment of Rs.10000 in this stock has grown to 6.8 Lakh in last 5 years.
2. Caplin Point LaboratoriesCaplin Point Laboratory is Pharma Sector Company. A stock of Caplin Point Laboratories was trading at Rs.15 in 2013 and today share price has crossed the level of Rs.620. Investment of Rs.10000 in this stock has grown to 11 Lakh in last 5 years.
3. PolsonPolson is chemical segment company dealing in dyes and pigments. In last 5 years, this stock has grown from level or Rs. 578 to Rs. 19561. Investment of Rs.10000 in this stock has increased to 3.38 Lakh in last 5 years.
4. Tasty Bite Eatables LtdTasty Bite Eatable is a Frozen specialty food manufacturing company. In last five years stock of Tasty Bite eatable has risen by 35 times. Investment of Rs.10000 is grown to 5.9 Lakh by now
5. Arrow GreentechArrow Greentech is the biggest manufacturer of water soluble films.This stock was trading at Rs.8 before 5 years and today it is trading at Rs.452.
You can share your view on the multibagger stocks.