What is Multibagger Stocks?
Feb 15, 2019 | 15:22 PM IST
Feb 15, 2019 | 15:22 PM IST
What is a multibagger stock? A stock which can give you manyfold returns. Yes, that's true. Multibagger stocks are defined in a similar manner. The legendary investor Peter Lynch has termed Multibagger stocks in his book One Up On Wall Street. As per him, multibagger stocks are those stocks which are expected to or multiplies more than twice. Let's go ahead explore the concept of multibagger stocks briefly.
How Multibagger Stocks Are Created
You must have been heard the phrase that Rome Wasn't Built In A Day. In the same way, multibaggers are not created overnight. To reap the multibagger returns you need to have immense patience and top notch skills to pick the best stocks.
Multibagger stocks are sometimes created by markets and sometimes by its financial health. In the case of multibaggers created markets, it's a story which a sector carries in particular economic situations. The best example of this can be the recent Infrastructure or consumption stories during the year of 2017 & 2018. The story has created many multibaggers which enriched the wealth of many investors. But these stocks turned out to be multibaggers in the very short span which created a risk of a correction. Which further arose in the year 2018 and drained down your wealth. So what's the use of these multibaggers, these are as good as earning short term returns and gambling on your money.
On the other hand, when you bet on the financial health of the companies you grab the growth at the reasonable price and risks are minimized. Essentially, these stocks might be unfavoured by the markets, but their business model gives them great revenue and profit visibility which further bodes well in the longer run.
How To Find Multibagger Stocks With Great Financials
As mentioned above it's always better to bet on the sound financials. An informed and wise decision will lead to a profitable investment and multibagger returns. But it's not that easy to find such stocks on the go. One need to scrutinize the various stocks on various parameters.
These parameters include growth determinants, debt levels, and forecasting. Though you may find these things instantly on the web you need to acquire an analytical approach to get the exact juice from all these data points. Though it's not easy to get in the shoes of analysts or investment advisors you can try to analyze the stocks and find the cues which you can further clarify from an expert. To learn the exact way and approach to identify multibaggers, read our scholarly article on How To Find Multibagger Stocks?
Best Multibagger Stocks For 2019
After understanding the concept of multibagger stocks, let's drop down to the key points. Multibagger stocks for 2019. Indian stock markets have already created the multibagger stocks like Bajaj Finance, Page Industries, Symphony etc which have offered huge returns to the investors in the last few years. Now what about this year, the year of ups and downs 2018. If you think markets have lost its shine then you must be ignoring some of the sectors which are shining right now. If you don't want to miss the multibagger stocks from those sectors read What Are The Best Multibagger Stocks And Sectors For 2019.