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All You Need to Know About Multibagger Stocks

Equitymaster's guide to Multibagger stocks with detailed analysis and much more. Also check out Equitymaster's powerful stock screener to find the Multibagger stocks.

Wikipedia describes a multibagger stock as the one which gives a return of more than 100%.

The term was introduced into investing by the legendary Peter Lynch in his 1988 best seller, One Up On Wall Street.

Lynch was a baseball fan and he borrowed the idea of a multibagger from baseball where 'bags' or 'bases' that a runner reaches are the measure of the success of a play.

So for example, a ten bagger is a stock which gives returns equal to 10 times the investment. A twenty bagger stock gives a return of 20 times.

Now that you know what it is, how do you invest in a future multibagger stock? How do you find a stock which goes on to be a 5-bagger, a 10-bagger, and in rarest of rare cases, a huge 100-bagger?

Well, a potential 100-bagger stock must be small. Sheer size militates against growth.

It must be relatively unknown. Popular growth stocks may keep on growing but too often one has to pay for expected growth too many years in advance.

It must have a unique product that would do an essential job better, cheaper, and/or faster than before, or provide a new service with prospects of great and long-continued sales increases.

It must have a strong, progressive, research-minded management.

An important point you should note here is that your goal should be to look for a good investment and not necessarily a multibagger stock.

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Why SBI Share Price is Falling

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After reporting highest ever quarterly profit, shares of SBI have encountered a roadblock due to these reasons.

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Mukul Agrawal is a prominent investor in India, who is known for his microcap and smallcap stock picks.

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Multibagger Stock Declares Blockbuster Quarterly Results & Stock Split. Do You Own It?

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