Get Top latest market news, Stock Market Views, Stock Market Updates and analysis on stock, derivatives, commodity and IPO markets. Get all Stock market news, BSE, NSE, Sensex Nifty, world markets, Indian markets, stock recommendation, Dalal Street, Day trading, futures, options, SEBI, market news, Business and other Financial News.
If your new in a market and lost your capital due to other people’s recommendation. And if your feeling that you cant invest in market now or you dont know where to invest now, then this is the turning point of your investment decision, we are providing some facts about selection stocks for long run which can multiply your investment. so don’t be sad now, learn to select such stock and try to take your decision of investment.
For most of us, investing in stock market is a fascinating investment option. We always look to invest in those stocks which can fetch handsome returns. Mutlibaggers are stocks which have the potential to earn multifold returns in a stipulated period of time. A stock that gives returns up to five-fold is called a five bagger, while the one which gives 10-fold returns is called a ten bagger. However, identifying them can be like finding needle in a hay stack
As stock investments are known as the faster means to make profits, most of the people find it very enticing and easy option for investments. Some invest without giving a second thought to the type of stocks they are picking. This definitely makes them suffer as they get negative profits by not making a proper investment right decision. For instance, in the late 90s and early 2000s, dotcom was in boom and their IPOs were considered to be multibagger stocks. However, they turned out to be completely opposite and the investors suffered huge losses. So it is very crucial to first analyze the stock you want to invest in and only then take the rightful decision.
What stocks are called or known to be multibagger stocks? Well, these are the stocks that assure you manifold returns. Say for instance, you are investing $1 in a stock; that stock would promise you $10. So this is a ten times bagger stock. Many a times, such stock options are mere hoaxes. While planning for investments, you need to be extremely careful about such stocks. It is always a good option to stay at bay from such bubbles as when these bubbles burst you experience the dip. Similar was the case with the dotcom companies. They had created a bubble, which when burst resulted in the loss of all the many investors. How to determine these bubbles? Is there some theory to be followed and be careful with the investments?
Not really, it is quite difficult to suggest anyone to stick to a particular theory as life and investments always teach you new lessons every single time you are caught in a difficulty or trading respectively. There is no single lesson to be learnt but yes you need to understand through others experiences as well. Life is too short to make all mistakes yourself. Especially, when it comes to investments, it gets very risky. So, it is better to be very careful and first analyze all the aspects. Only then make the investment decision.
So, on priority you need to do a technical analysis of the firm you are going to invest your money into. Check the financial health of the company, its history, if any setbacks experienced, if yes, what were the reasons, the current ratio, debt coverage ratio and the turnover ratio of the company. After getting this data, do a comparison with the other companies falling in the same sector. Only after proper analysis, take your decision. If any loophole observed, it is always better to divert your investments to some better option. This requires a constant study of the market, the performance of the stock and the liquidity for the same.
What to consider while deciding your stock picks for long-term timely investment…
1. investors must always be cautious about the fact that selected company follows the required corporate governance norms.
2. management behind the company, its leader, promoter and quality of their work should be consider.
3. Avoid the sectors which are not fit with current economic condition of your country, because such stocks can hurt your expectations due to multiple unfavorable reasons which is not in control of the company’s management’
4. study the equity of company and select them which are having decent equity in market not much higher and not much lower, because high the equity may give earnings and low valuation, and if equity too low then it can be controlled by some selected group in a market. select the stock which having decent equity base with higher valuations and higher earning per share knows as EPS.
5. look for the promoter holding in a stock if promoter holding is higher then chances of price jumping is more possible due to lower of free float stocks. and even its shows us the interest of promoter in his company.
6. study more on stock valuations and try to identify stocks which are undervalued in a market, because chances of risings are high in undervalued stocks when they start there move and they can give you multiple returns, time factor is highly important while taking decision to invest in such stock.
7. Stock which are not in a lime light but having good potential that should be consider first.
8. while selecting any company study there cash flows, cash flows gives a clear identification that company is financially strong and it can give us hint that company will not face any financial crisis in near future.
9. The share price of the stock should not reflect its earnings growth. One should also take a note of availability of inherent liquidity in the stock. because low liquidate stocks with higher price can give us indication that stock is in selected hands and there perception about stock can hurt our investment decision.
