Скачать или смотреть 🔴 What is a Multibagger Stock? Definition + Indo Count Industries share analysis

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What is a multibagger stock or a share? | Definition with an Example | NSE BSE| Share market


What are Multibagger Stocks?
Multibagger stocks are equity shares of a company that generate returns multiple times higher than its associated cost of acquisition. These stocks were first invented by Peter Lynch, published in his book ‘One Up on Wall Street’.

Multibagger shares are issued by companies having tremendous growth potential, demonstrating sound management and production techniques. It also exhibits excellent research and development skills of a company, allowing this product to generate high demand in the market.

What Characteristics Should a Company Possess to Generate Multibagger Shares?


Advanced research and development skills
Robust growth of a company is associated with a massive volume of sales of its product in the market. To achieve this, quality products have to be delivered by such companies, providing immense customer satisfaction. Considerable investment in research and development of a product has to be undertaken by companies to enlist its securities in the stock exchange as Multibagger stocks.

Start-up companies launching products having tremendous customer usage scope and no close substitutes are likely to generate massive demand in the market. These companies can increase their paid-up capital by issuing Multibagger stocks.

Companies acting as a monopoly or duopoly in the market can also be classified as an issuer of Multibagger shares. Aggressive pricing strategies along with entry restrictions can help companies increase their total revenue generation.

High growth
You can easily identify Multibagger stocks by looking at the performance of an issuing company. Businesses demonstrating high-profit generation and limited debt liability are top contenders. Multibagger shares have high earnings per share as well, increasing your dividend income on the investment amount. These companies tend to have a low debt to equity ratio, indicating strong financial management skills. Price to earnings growth ratio (PEG) is also high, as the returns on one unit value of a share are several times of the primary investment.

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