Multibagger stocks ideas in India
Making money from the stock market is not an easy task. Retail investors always look for a stock that can give his multi-bagger returns in the future. To find these stocks it required a lot of information regarding the business of the company, company products, management.multibagger stock ideas are difficult but now impossible. However, retail investors, are cant gather this information before investing. To ease this process you will find a secret process to identify the stocks which can give you good returns over the period of time.
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- The only thing drive that stock price is it's earning. If earning is not increasing stock price will fall. If earnings are increasing stock price will increase.
- Invest in those companies where the people repeat their buying every month.
- The multi-bagger stock is always present in your homes or in malls. You should invest the money in the perceived value of the stock, not in the intrinsic value but the stock should be from your domain knowledge.
Filters for Multibagger stocks ideas in India
- Any stock whether smallcap-midcap-large-cap can be a multi-bagger
- Buy the quality stocks and hold for long term
- Read about the management and the annual report
- Invest in those companies where the companies shareholder is buying the stock from the market because shareholders earn higher when the stock price increases.
- The first filter is to select the stock Return on capital employed greater or equal to 15% over the period of 5-10 years.
- Why Return on capital employed should be greater than 15%? because the company borrows money from the banks or other institutions at 7-9% if Return on capital employed is the same there is no benefit of expansion using. The company will pay more interest to the lenders which will eat the profits of the company.
- A lot of people believe that companies like Nestle, Asian paints, HDFC bank are blue-chip companies.
- Most of the retail investors think they are similar stocks and give small returns. But these companies are a compounder.
- These company's revenues growes with double digits over the last 10 years and Return on capital employed is more than 15%.
- These companies Prices to earning in the '90s is also 40+ and it never comes down still they are trading at a higher price to earning compared to its peers because they outperform other companies'in ROC.
- So the price to earning filter is not a good filter to selecting the multi-bagger companies
- If the revenue of the companies growes in the double-digit year after year over the period of 5-10 years it can be a good money compounder and you can get 10X return over the period of 10 years
- These companies never show the degrowth ever in the worth market conditions
- Find a good buying level using 200 days moving an average of 100 days moving an average
- Move out if the company don't perform the same growth over 2 years
- The truth of the brokerage industry, Trading expert & retail traders
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