Multibagger Stocks Meaning: Though there is no standard definition of Multibagger Stocks. The term ‘Multibagger’ refers to a stock that generates multi folds return over a period of time. There is no standard time frame in this case. Literally, it means a high annualized return. However, it’s very tricky to find out such stocks. You can find many websites, various analysts who will tell you which stocks will be multibagger, but my suggestion is not to follow them blindly. You can choose these types of stocks by yourself. By following some steps and analysis over a period of time you can choose one. No one can refer to a multibagger stock with 100%confirmation. So, in Multibagger Stocks Meaning an indirect uncertainty is there. The content ‘Multibagger stocks meaning’ is going to be an analytical discussion.
Before we step into the main points of Multibagger stocks, it’s our duty to warn you about every possible marketing strategy by using the term Multibagger.
I was reading an article regarding FNGC sector’s research reports. A few years back in FNGC sectors their sell suddenly dropped by a huge amount. After the incident, they hired a well-known research-analyst group. The group suggest adding the term ”Gold” in their products’ name. After applying the suggestion their selling level was increased by 10% to 12% on those products which had the term ‘Gold’ with their names. It’s basically a marketing strategy. As in India Gold is considered as one of the precious metals, after using the word ‘Gold’ those products’ perceived value was increased.
Just like the example, in the stock market also, some buyers use this term ‘Multibagger Stock’ to increase the buying level and making a profit. They know very well that after seeing the term ‘multibagger’ people certainly invest for multi folds return. Some analyst also misuses this term in order to gain profit. So, it is highly advisable to identify stocks on your own.
Now, let’s come to the most awaited features points by which one can identify a Multibagger stock. A stock might have the potentiality of multibagger, one just needs to identify it. Every investor must keep a point in mind, there are lots of volatility in the stock market. Therefore, after analysing few stocks as multibagger, if any negative aspect will come out, do not lose hope.
These are some examples of Multibagger stocks from 2016-17.
Multibagger Stocks Meaning and Steps to Identify:
I am mentioning some steps by which one can find multibagger stocks. These are categorized into few steps. I can assure one thing that by following these steps one can surely find good stocks with a profitable return.
- Gain Knowledge: If you want to get a highly profitable return within a couple of years, you must have up to date knowledge regarding Govt policies, national-international factors, economic fluctuation, market movements. This is the foremost step before entering into the investment line. You can rely on day to day news, different news site, web channels etc. Before choosing a stock u must have enough information about your surroundings.
- Identify Sector: 2nd and one of the most vital steps to identify multibagger or any good stock is identifying proper sectors. Based on the current market scenario and your knowledge choose a few sectors of the market. The sectors which will perform well in future, choose them. Watch and exercise on them around 3 to 6 months to get a proper review of their performance.
- Stock Selection: After selecting sectors move-on to the next step, stock selection. Now, pick 2 or 3 top most stocks from each sector, you choose.
- Analyse those stocks: Now comes to the main part, analysing those stocks fundamentally and technically, from every aspect. You have to analyse those remaining stocks’ each and every minute detail quarterly and annually.
- Time to Entry: Analysing stocks is not the end of the story. There will be real time to buy stocks, you have to wait for the market signal. One should not invest when the market is under correction. One must watch out market movements, sector scenarios and stock fundamentals before put their money for investment.
I can assure one thing that by following these steps you will surely find a good stock with a highly profitable return, the stock can be multibagger or not but surely it will be a good one.