How To Select a stock for Investment?
♨️Check fundamentals of a stock
♨️First Go to BSEINDIA.com
In the search box type the name of the stock which you want to invest in :
♨️Now select Financial, see its results Annual as well as Quarterly Results.
♨️Firstly see Revenue, if its increasing every quarter as well as annually or its stable but not negative then its a good stock and can go ahead.
♨️Then see its Net Profit , if its increasing every quarter as well as annually then its a good stock.
♨️Then see its Debt as well as Reserve Capital :-
Suppose the Debt of a company was 100 crores in 2014, 80 crores in 2015, 60 crores in 2016, 35 crores in 2017 and 20 crores in 2018.
And its Reserve Capital in 2014 was 210 crores in 2015, 225 crores in 2015, 235 crores in 2016, 255 crores in 2017 than it has passed even 2nd parameter.
♨️Here you can see the Debts of this company is Decreasing every financial year and the Reserve Capital is increasing every financial year. So, its a safe company to invest in. If a Company has zero debt but has good Reserve capital then its a Golden stock to invest in.
This can become Multibagger Stock in future.
♨️Now see Shareholding Pattern of that stock. Just see the percentage of stock promoters are holding & public is holding.
For example :-
♨️Suppose in 2015 Promoter Holding was 66% Public or Institutions holding rest 34%,
2016 Prom Holding 70% and Public and inst=30%,
In 2017, Promoters holding 72% and public and inst=28%,
In 2018 Promoters holding is 75% and public and inst=25%.
♨️So its a very less Risky stock because Promoters holding has increased every year and not decreased so they have faith in their company and If FIIs holding also increases every quarter or annually then additional good point for stock.
Now see its P/E Ratio and also check its Industry P/E Ratio:
♨️Suppose its a Pharma stock trading at 200 rupees and its PE ratio is just 10 and Its Industry P/E ratio is 30 What does it means ?
It means that the stock has the potential to triple from here because its Industry P/E ratio is thrice its own P/E ratio But it should have growth,Good product line up & in nxt few months or years , Its valuation should look cheap vs industry.
♨️Next point is to check if Promoters have pledged its shares or not. Suppose company is posting very good results every year but most of its shares are pledged by promoters then simply avoid that kind of stock.
♨️Now, next see its Book Value. Book Value is Total Assets of a company Divided by its total no of shares. Suppose its Book value 100 and the share is already trading at 500 For me its already a overvalued stock because its trading way above its book value even though its a good company risk element is high for investment.
Now, Suppose the Book Value of a stock 400 and its currently trading at 100 Its a good pick or safe pick for investment because its Book value is still 4 times its current price. But u have to check other above mentioned factors also to invest in it. Only if its Book Value is high than its current price doesn’t mean that stock is good.
♨️Another way to select turnaround story stocks. Suppose a company was posting losses every financial year, but suddenly this year it has posted profit. So the stock is ready for turnaround now. But need to study its sustainability in products,Cyclical bussiness nature,Govt. Policy and Global policy which are and can effect stocks product line up and demand.
♨️Suppose, the company had huge debts but every quarter its decreasing its debt, its also a turnaround candidate
Now how to find Multibaggers. I know everyone wants to know this :-
🔷️Every body wants Multibagger stocks But no one wants to wait patiently.
🔷️Buying stocks just when story just starts to built up for the stock.
🔷️See All time data of a stock suppose A stock was just Rs.10 in 2010 and went to 250 in 2014 but started coming down again and came to 100 and now again in 2017 it crossed 250 and closed above 250 twice.
🔷️Its a multi year breakout in that stock now and its a multi bagger now just keep a tight stop loss 200 to 205 and keep buying it till it reaches 500 atleast that can be First Target.
🔷️ Now at 500 again review the fundamentals mentioned above if everyting is fine then stay invested for further upmoves or if fundamentals not supporting then simply just book your profits around 500.
🔷️You can’t get Multibagger stock without pain & Patience.Few examples are Vinati organic,Eicher Motors,WestLife Development,Chamanlal Setia,KPR Mills,VGuard,Natco Pharma,Atul Ltd,TTK prestige,Wabc0,Havells Etc
🔷️You can find Early stories & Hold stock with conviction for Next 5 to 10 years.
Above stocks gave 50x + Kind of Returns also.
FOLLOWING TABLE SHOWS STOCKS THAT HAS GIVEN MORE THAN 5500% PLUS RETURNS IN LAST 10 YEARS.
10000 invested in Westlife Development in 2009 would have grown to 1.75cr & 10000 invested in Bajaj Finance would have grown to 57Lacs
If You cant find Multibagger ideas Not to worry
Just have patience to keep stock holding for next 10 years.
Just follow our website.
🔷️Soon we are coming with Gold Multibagger Stock Ideas which can be 5x/10x/20x/50x in LONG TERM.Only You need to Hold them patiently in all ups & Down
DISC – All views expressed are personal.Its only for Educational and study purpose only. consult your financial advisor before investing.
4 thoughts on “How To pick Multibagger stock Early for Investment”
Very good information provided, it will be very much helpful to learners. May God bless you.
I have one query
Which is good to consider before buying a stock
Enterprise value lower than market cap
Enterprise value higher than market cap
Enterprise value close to market cap
Enterprise value Higher then MCAP is good.
For Turnaround companies Enterprise Value is low and it increases as company performance is improved.