What makes a stock a Multibagger

•       Every one has a  very important question in their mind that should be answered is, “What is the key point which makes the stock a multibagger and how one can identify these multibagger stocks in early growing stage?”.

•     Actually, there is no guarantee of assured returns on the investment once you enter the stock market.

•     But  there are few important key signs that can help to identify a multibagger stock in early stage.

•   Strong management with good promoter holdings, regular revenue growth, unique business model, growing PE ratio (price to earnings) i.e. the ratio of its share price and earnings per share, high and sustained margin over the years due to less competition because they are leader in their sector.

•    Also it is very important to say that they have a lower debt level against equity and able to generate free cash flow  which helps in their future expansions of business and paying regular dividend and bonus.

•  Hence, Regular paying dividend and issuing bonus is a good and vital indicator of any multibagger stocks.

•       It is very important to mention that they conduct regular AGM (annual general meeting) where the management is very vocal about the vision and future aspects of the company and also explain about the steps being taken to achieve the goal in future.

 
Note:-should invested in the stock with a long term horizon and has to believe that it is their own company because they also have share holder of the company. As the company will grow, their investment will grow like that.