Hello, Traders welcome to “Multibaggercalls.com”, Here in this article, I’m going to explain how to find Multibagger stocks.
Multibagger Stocks are those Stocks that have the potential to grow multiple times.
Finding the best Multibagger Stock of investment is very difficult.
But by following the below steps you can identify Stocks which give multiple returns in the future.
To analyze below said steps you need to use any fundamental stock screener.
Future Business Potential.
The first thing you should check out the business modal and future potential of the company.
You need to check the product and the services provided by the company.
If the product or services is having future demand then the company can make the profit from their product and services and the profit will reflect in the stock price.
Or if the product and services offered by the company are not having future Demand, then definitely the stock will give a negative return.
So, whenever you search for Multibagger stocks you need to check the Future Potential of Business.
The second thing you should be check for Multibagger stock is the Debt Level of the company.
There is no debt level defined for the selection of Multibagger Stock.
It will vary from industry to industry. Preferably a company should be debt-free.
But finding the debt-free company is more difficult because every company needs credit for Expansion or development of products and services.
So, you can look for a low-level debt company.
The logic working behind the debt of the company is that if the debt level is high the company will spend more money for repayment of debt.
To identify the multi-bagger stock, You can consider a company that has a debt of not more than 30% of the equity value.
Good Performance History
The third thing you should check the company’s net profit margin and revenue on a quarter-on-quarter basis as well as on a yearly basis.
Multibagger stocks are a consistent Profit maker.
You can easily check the performance history of any company visiting the NSE & BSE and Official website of the company.
Sources of Earning
The next to identify Multibagger stock is Sources of earnings. Along with the revenue numbers of the company.
You have to check sources from which the company is making money.
- Are the company have Multiple Sources of earnings?
- Is the sources of earning are Consistent?
- Are the operations of the company is easy to understand?
If Yes! Then the Stock may be the Future Multibagger Stock.
Expansion or New Product Development
The fifth thing you should be check business expansion or new product development.
Is the company is working on the expansion of the product/services or development of new products/services?
If the company is not doing anything to Expansion/develop its product and services, then it’s very difficult to grow in day by day changing the market situation.
So, always look for those company’s stock, which considerate on the expansion/development of new products.
EPS (Earning Per Share) Vs Valuation
The last thing you should check to find future Multibagger stock is EPS growth Vs Valuation.
The EPS means profit divided by the number of shares.
The EPS of the stock must be at a reasonable level and the Valuation of stock should not be very high.
If the valuation of the stock is very high then it is not Multibbagger Stock.
So, always select stock which has reasonable level EPS and attractive valuation.
If you follow the below steps, Then you can easily find stocks that have the potential to become future Multibabber stocks.
- Future Business Potential
- Low Debt
- Good Performance History
- Sources of Earning
- Expansion or New Product Development
- EPS (Earning Per Share) Vs Valuation
In addition to the above, You can also check factors such as Management of Company, Business diversification, Dividend Payout, etc. It’s Known as Qualitative Analysis.
“I hope now you guys understand how to find Multibagger stocks for long term investment. If anyone has any queries regarding find Multibagger stocks please ask in the comment box.”