The article discusses about the idea of multibagger stock and how to identity that. Main features of multibagger stocks are also discussed which can help a trader to recognize that.
The term Multibagger stock is very popular term among traders these days. The term came from very famous Peter Lynch, the manager of Fidelity Investments Mutual Fund. He used this term in one of his book and gave the examples of giant companies to explain the term.
Many traders and investors find it difficult to understand the idea of multibagger stock and what it really means. In simple words these are the stocks that give return several times. For example, the stock which gives 300 percent return and 200 percent profit are known as 3 bagger stock and the stock that gives investment return 20 times is known as 20 bagger stock.
All the stocks that give good returns in the long run come into this category and indeed these are the best share to buy for long term. Many other concepts also become popular over the times with the reference to this term. Thomas Phelps used the term 100 bagger stock for the stocks that show potential to give return 100 times.
In India, also there are many multibagger stocks but they are mainly found with the small cap, penny or micro-cap companies. These stocks are 10 bagger or 100 bagger stocks and gives really good returns. One needs to find out about such stocks and it is possible after good research of the market. The best tip to find out such stocks is that it has a low capitalization in the market.
Indices Master which is a best multibagger stock advisor in India has given few tips and guidelines to identify multibagger stocks. As per the company, one can recognize multibagger stock through its features. The first and foremost feature is that it shows very big opportunity of profit and that is even bigger than the size of the company.
Normally, such companies give services which are unique in the nature and have no competition or very less competition in the market. The trader should also look for the financial condition of the company as the company offers multibagger stocks either have very less debt or completely debt free. Even the promoters of the companies are very loyal and they share their shares with the shareholders. Also, the promoters try to work for the progress of the company and try to bring it on a higher level.
All these features help a trader to identify multibagger stock and surely it is a best choice to invest money in and to gain many fold monetary profit.
Multibagger stock is a very good option for the long term investment for any trader and it increases profit and revenue both. The latest trend of investing in multibagger stock is a must to follow trend for good investment.