What makes a Multibagger

Discussion in 'Ask A Query About Your Stock Picks And Portfolio' started by SubodhPatal, Aug 9, 2016.

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  1. SubodhPatal

    SubodhPatal New Member

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    Hi Friends,

    This thread is to discuss on identifying potential multibaggers. How multi baggers are created?

    What makes a Multibagger as multibagger etc.

    Post your views and stock ideas which could be potential MG.

    Thanks
    Subodh Patal
     
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  2. Guru Vachaal

    Guru Vachaal Let's discuss the fundamentals..

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    Lovely question !!

    I will write very precisely as per my experience & belief about multi-bagger stocks. The actual hidden meaning might be a bit different than my words. In stock market world, this term is used for a stock that multiplies your wealth exponentially ( at least twice, thrice or even 100+ times). It is just a fancy word used by the media to gain attention. Unfortunately such stocks don't exist at present but evolve over a period of time in future. You can term a stock as multi bagger only after it has given multiple returns. Just like you don't call a plant as tree untill it has become so. Stocks have become multi-baggers in the past and will yield multiple returns in future but its wrong to call a stock as multi-bagger at present.

    What makes a multi-bagger as multibagger is "time" and "continuous business growth".

    First step to find multi-bagger stocks is understanding the basics of the market. I believe 80% market participants don't even know the basics. Interestingly, there are people who spend years in the market but don't even know why prices move up and down. So read books and gain knowledge.

    I have been benefited by few multi-baggers in my life and my best multi-bagger mantra is "Don't search for a multi-bagger".

    If you are new in the market and could not understand or did not find it interesting it then take a print out of my post, stay connected with the market for at least 5-10 years and read it at that time.
     
    Last edited: Aug 9, 2016
  3. SubodhPatal

    SubodhPatal New Member

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    Rightly said Guru.

    Without going into Technical Nitty-Gritty, in my personal views - Multibaggers have at least below traits -

    1. It is created over the mid to long period of time (5-15 years of time frame). No multibagger is created within a year or so (except few operator driven counters). One such genuine multibagger in last one decade is Ajanta Pharma.

    2. Multibaggers are mostly created from Small Cap stocks.

    3. Multibaggers demand high degree of patience.

    4. Every multibagger became multibagger when someone purchased them at a darn cheap price (a possible PE ratio of 10 or below). Ajanta Pharma bought at market cap of 5000 Crore and today at approx 12.5K Crore is not a multi bagger. But Ajanta Pharma bought at market cap of 100 Crore and current M Cap of 12.5K Crore means a 125 bagger.

    5. You can not have 10 Stocks in portfolio and all 10 will turn into Multibagger. Probability is 1 out 10 could be a potential multibagger.

    6. Finally, have patience and hold for long term.
     
  4. Mukund

    Mukund New Member

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    For the stock to become multibagger, during its initial phase, when it is small cap, its sales and profit both should grow at CAGR of more than 20% consistently.
     
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  5. Srouta Mukherjee

    Srouta Mukherjee Well-Known Member

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    This is imp point.
     
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  6. Amitkvb

    Amitkvb New Member

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    Hi I am amit after reading all the knowledgeable articles from the senior members It seems this is the best platform to discuss understand and to invest .hats off to all of you
     
  7. yembee

    yembee Active Member

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    "What makes a multi-bagger as multibagger is "time" and "continuous business growth".- @Guru Vachaal

    Agreed.... Potential multibaggers can be identified ...Investing a single lot and expecting it to become a 250x is much difficult to materialize .... As the conviction gets firm it has to be auctioned by adding to the position and to make it in to a sizable value ...is important to reap the benefits
     
  8. D Mohan

    D Mohan Member

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    Watch this video in which Sunil Minglani explains that multibagger stocks born by accident not by intend
     
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