How to Identify a Multi Bagger Stock

How to identify a multi bagger stock

A question that is often asked in my stock market training classes is:
How to find a multibagger stock?
I'll point out a few footprints of a multibagger stock in this post, and give stocks at the bottom which can give huge returns in coming years.

Before that, what is a multibagger stock? The answer is very simple.
A stock that can give very high returns in a very short time is a multibagger stock.
Now remember, we are talking about investment here, not trading.
In an "investment" style, a short time period varies between 5-10 years.

What should you look for in a business to determine if its a multibagger stock or not?

1. Future business potential
If the market is already stagnated, the company cannot grow. Likewise, if the product is losing demand, the company cannot grow.
An example is Moser Baer who were one of the leading manufacturers of CDs, but today the product itself has lost demand because of new technology like Pen drives and hard disks...

2. Low debt level:
The company should not have a high debt level otherwise most of the profit will get used up in paying the debt, and cannot be used for business expansion etc.
A low Debt to Equity ratio represents a low debt level. Debt to Equity ratio of companies are available for free on various websites, and even on websites of stock exchanges.

3. Consistency
You cannot depend on the company if they are not a consistent performer. What if they posted a loss of 20 crores in the first quarter, and a profit of 30 crores in the next, and then a loss of 10 crores again? Would you trust this company?
Isn't it better if a company is just posting a profit of 5 crores every quarter, with a small, but consistent growth in profits?
Next time you try to find a multibagger, try to find these above mentioned footprints first.

As promised, here are the stocks: 2016-17

Bombay Burma Trading Corporation

Bengal and Assam Company

(Both have given a 50% return in a very short time)

The same material we use in our stock market classes is available as a single download PDF file. Its not an ebook written by just anyone.
Its the complete Munafa Training Material we teach in our 5 day paid seminars!
Download here: http://www.munafasutra.com/page/ebook

From 9 chart patterns that never lie, to candle stick analysis, to FnO trading with math and examples. Its all there!

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