Almost every person has the dream to earn more returns on the investment that they have made. Nowadays you might be coming across some concepts where they want you to invest Rs. 500 and after a certain period, you can get Rs. 5000 in return.
Sometimes, such headlines might sound very fishy. But nowadays certain ways help in getting multiple returns on the amount that you invest in the market. one of the most popular concepts that can lead to better returns is Multi-bagger stocks. If you are a regular investor in the market, you might have come across this concept.
Multi-bagger stocks are stocks whose value is likely to increase and can provide high returns. Here you can take an example if a person invests in a company. He invested in the company when the stock price was Rs. 100 and within 3 years now the stock price has become Rs. 1000. This is a multi-bagger stock as it provides the investor with 10x returns on the invested amount.
Although it might be a little critical for the people to identify which multibagger stock will be highly beneficial for them. Here are some of the hacks that will help in identifying the best multi-bagger stock available in India. Let’s have a look at them.
- Have strong promoter holding: Promoters are those who have either given birth to the business or have direct control over the company operations like you can say CEO, founders, employees, etc. this is a very important factor that needs to be checked if you are going for the stake of the company. All the companies that have higher, as well as an increasing stake of promoters, will mean that company is on the right verge of growth.
- Get involved in the high-margin business: One of the simplest hacks to identify the future multi-bagger stock is to invest in the companies with higher margins. It will also be great to invest in a company that has very less competitors in the industry. This way the chances of the company growing in the market are quite high. Even the investors can easily get amplified returns.
- Capable and strong management: The one factor that can surely affect the stock returns of the person is the company’s performance. If the company has very strong and capable management, all their processes will be done in a very defined way. This will help the company to grow well and be on the right track to success. If the company is doing well, it is sure that the stock price of the company will likely go high. So the person needs to look for a company whose management is capable of handling all the operations of the business very well. This decision can surely help you to either gain or lose your money in the future.
- Healthy earnings growth: almost every investor wants to get high returns. So they want to invest in a company that is earning and growing at a higher rate. It is highly recommended to check the earnings per share so that you can determine the earning growth rate. Find all the possible information about the company before making the final call for the investment in multi-bagger stocks.
- Competitive advantage: The company’s competitive advantage can either benefit the company to a great extent or even can put you all down. Just make a proper analysis that the company is standing out differently with the products and services made available by them. If the company has the right strategy to cope with the competition. This will help the company to survive and even grow in long run. If the company is having that great competitive advantage, it is likely to grow in long run.
- Growth potential: Always find a company that has a great potential to grow in the market. A company that has this potential is like to gain more profits and further, it will be divided into investors. This is one of the most important hacks that must not be ignored at any cost.
It might be a little tricky to look for multi-bagger stocks. Do proper research about these stocks if you want to have high returns in the future.
These are the type of stocks that provides you with the opportunity to get high returns. The person just needs to use their knowledge and money in such a way that the returns can be multiplied to great extent that too in a short period. Identify the right company before you invest in the company.
Although just keep in mind that the future is uncertain, better be prepared to take the risk of investing your money in the market. There will only be high returns if the investment is done with proper planning.
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