According to experts, following characteristic should be kept in mind while scouting for a multibagger:
1 Look for companies having lower equity base because lower the equity base higher would be the valuations and earnings per share (EPS).
2 Stocks where promoter's holding is higher, the free float is lower, so there are chances of prices jumping on the back of strong earnings.
3 Dig deep through information to recognise a substantially undervalued stock.
4 Stocks which are not much noticed by market can be potential multibaggers.
5 Investors should opt for companies with strong positive cash flows and robust business model.
6 The share price of the stock should not reflect its earnings growth. One should also take a note of availability of inherent liquidity in the stock.
7 While selecting companies, investors must always be cautious about the fact that selected company follows the required corporate governance norms.
8 The quality of the management and goodwill of the promoters should be considered.
9 One should try and looking for multibaggers in high growth sectors , which are in sync with the economy.
10 And overall you gut feeling to stay invested for a period of at least minimum of three to five years with the stock .will give you smart returns .
1 Look for companies having lower equity base because lower the equity base higher would be the valuations and earnings per share (EPS).
2 Stocks where promoter's holding is higher, the free float is lower, so there are chances of prices jumping on the back of strong earnings.
3 Dig deep through information to recognise a substantially undervalued stock.
4 Stocks which are not much noticed by market can be potential multibaggers.
5 Investors should opt for companies with strong positive cash flows and robust business model.
6 The share price of the stock should not reflect its earnings growth. One should also take a note of availability of inherent liquidity in the stock.
7 While selecting companies, investors must always be cautious about the fact that selected company follows the required corporate governance norms.
8 The quality of the management and goodwill of the promoters should be considered.
9 One should try and looking for multibaggers in high growth sectors , which are in sync with the economy.
10 And overall you gut feeling to stay invested for a period of at least minimum of three to five years with the stock .will give you smart returns .
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