Sabtu, 06 Februari 2010

How to Identify Multibaggers?

How to Identify Multibaggers?

IF you had bought 100 shares of Wipro at the rate of Rs 100 per share in 1980, they would be worth Rs 200 crore (Rs 2 billion) today.

If you had invested Rs 10,000 in Infosys shares in 1992, you would be richer by Rs 1.5 crore (Rs 15 million) today.

If you had invested Rs 1,000 in Ranbaxy in 1980, you would have got Rs 1.9 crore (Rs 19 million) today!

And, not so far back in time, if you had invested Rs 40,000 in Unitech during the lows of 2004, your bank account would see a whopping Rs 1.1 crore (Rs 11 million) today!

Identifying the Multibagger stocks is an art. And not the everyone on this planet can master this art. The above are the historical examples. But just tell me that if you have bought 100 shares of Wipro in 1980 at Rs.100 per share price than how many of you have still hold the stock after it becomes Rs.700 per share? Most of you would have exit from the stock by booking 7 times profit. However, those patient investors who have hold the stock for 30 long years would have make fortunes today.

Here are few easy steps to identify Multibagger stocks.

- Go for a company which gives regular dividend. Dividend paying stocks mostly lie in A group category.
- Preferably go for a Mid cap stock which in future can become a large cap. Mid cap stock have a greater chance to move upwards and that to fast. Preferable a stock whose market cap is less than 1000 Crores.
- Go for a stock in a particular sector which is in boom.
- Look out for the companies financial. In this check out the companies profit f last 4-5 years and check it out that it is increasing every year. One can also check out EPS of the company.
- Check out whats running these days, Say for example there is a invention of a new technology which will be in demand in a near future. An excellent example is invention of 3G. Even TATA Nano can be taken in consideration as it is only one of its kind being the cheapest car in the world.
- Check out for a companies order value. There are various companies which have a good amount of orders for future which are of great importance to a company.
- One can also look out for a company which has good amount of land / property. Unitech had a lot of lad which can in the eyesight by end of 2005. An investment of Rs 40,000 then would be worth over 1 crore by the end of 2007.
Last and not the least be confident in your stock.

Few don’t s in selecting a multibagger stock.

- Don’t select a Penny Stock.
- Don’t loose hope in your company.
- Don’t depent on others , do your own research.

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