WANT TO SEARCH FOR NEXT MULTIBAGGER? READ THIS………

1. Checkout Promoter Holdings

Check out the promoter holding in a stock. Ideally it should be more than 55% OR should be increasing by each fiscal year. If the promoter holding are above 70% then grab the stock. The factor that usually works in favor of companies with large promoter holdings is the fair amount of confidence in the promoters. The reason is that promoters are holding a significant chunk of their stock and low free float always helps the stock rally up.

As a rule of thumb, high promoter shareholding represents monetary interest of the promoter group in the company. It demonstrates the commitment of the management in running the business. The promoter holding could also provide indications about willingness of the promoters to put in considerable time and efforts in developing the business

2. Which Sector Company Belongs to??

Check out the booming sector of the year. Consider the view long-term. Always try to find out the undervalued OR underestimated sector. I can bet on the Industrial gas and chemical sector considering a term of 2 years. Industrial gas sector will boom shortly as there will be plethora of demands for these gases. Although there is no Large Cap company in this sector, but a smallcap when turn into large cap called multibagger

3. Is there any underestimated stock??

People always talk about the stocks which are favorites of the brokers, which are heavily traded. But I think that nobody should rely on the broker tips, always do whatever you think is right. There are so many stocks that are still underestimated by peoples only you need to remove cloud of dirt from them.

4. Book Value(BV)???

If you are searching for multibaggers then go for a stock whose CMP is less then it’s BV. Many times I have bought stocks who’s BV was greater then their CMP. BV also plays an important role while buying a stock

5. Don’t look at the Management

How many people know the GM or CMD of Satyam Computers?? Only few. My dear friends, don’t look at the directors of a rock solid company. On 31^st December 1995 Price of Satyam Computers was only 7Rs (yes, seven rupees) and it was 737Rs on January 02, 2008 with CAGR of 59.05. So find out the Next Satyam Computer……….

6. Prefer Small CAP over Large CAP if you hunting for Multibagger

The market cap of a company is inversely proportional to whether that company could be a multibagger or not. In other words companies with small market caps are more prone to going up a number of times compared to companies with large market caps.

Company Market cap on 31^st Dec 1995(in crores) Market cap today

Infosys 708 81221

Satyam 228 23641

HDFC 135 29766

I think above data is enough to prove my point.

7. EPS

There is no such standard EPS value. Check if EPS is increasing year by year then grab the stock. More the EPS more value will stock gain.

8. Hold (The Biggest factor in wealth creation)

Hold the stock for a long term, at least for 3 years. You can see your money increasing in multiples.

I biggest mistake was to sell my Allied Digital Stocks in rs300 in December 2007 now its hovering around 900 after touching 52k high of 1200Rs.

9. Small Value Stock

Try to get a stock which is lower than Rs80 or Rs100. Only they can turn to be a Unitech. There is only a few chances that a stock of Rs500 will become multibagger.

10. Listen to Your Heart – How is your sentiments with Stock?

When you want to invest, then do research on 10 stocks and listen to your heart in which stock you want to invest.

11. Invest in Business you know better

Always invest in business not in stock. Don’t invest in a company who’s business you don’t know.

Dear Investors, I would love to have your comments on my this posting