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Sunday, December 23, 2012

Finding MultiBagger Stocks!

One valued reader asks this question:

Question: I am in the search of finding multibagger stocks. Can these companies become multibagger : Karuturi Global Ltd., Green Earth Resources & Projects Ltd.(formerly Austral Coke), Moserbaer, Farmax India Ltd., Kwality Dairy Ltd.,Piramal Life Sciences Ltd.
From all these stocks mentioned above ,all are falling downwards except Piramal Life Sciences Ltd..I want to know about the future prospects of all these companies.

Answer: We are all in this (elusive) search of the next multibagger which can painlessly multiply our money by 10X times. But, one should not fall in trap of investing in really low quality companies just because their price is low. 

These Companies are totally junk: 

1. Karuturi Global Ltd: Last five quarter revenues are minimal and erratic. Promoters have only 18% holding. 
No dividend declared for 2012.

2. Green Earth Resources & Projects Ltd.(formerly Austral Coke): Last five quarter revenues are erratic and company is consistent loss making in this period. Balance sheet is totally junk. All shares are dumped to public, promoter holding low.

3. Moserbaer: I have written in detail about this in past - "The plight of Moser Baer".

These companies are not so junk, but nothing great about them either:

4. Farmax India Ltd: Again last five quarter revenues erratic. This is not as junk as the other firms, but i'm not sure of their product quality. This is a smallcap FMCG firm. No dividends paid ever. Nothing very great about this stock.

5. Kwality Dairy Ltd: This is a speculator friendly stock and has seen huge manipulative highs in the past. Fundamentally, nothing wrong with the firm. 10% dividend paid in 2012. Good shareholding with promoters. Go for this with some caution.

6. Piramal Life Sciences Ltd: Where are the revenues for this stock? This is a loss-making firm with negligible revenues. This firm makes or is trying to make medicinal products from herbal extracts. Is primarily a R&D driven firm, and has good promoter shareholding of 57.54%. Basically, the charts show the price is going up from last few months. In absence of financial information, if someone has internal information of some blockbuster drug getting released, one can take a punt. I don't have any such information and hence cant really analyse this scrip. One can take a trading punt with trailing stop-loss. 

Basically, search for multi-bagger is like searching for wife. Go for good girls (stocks) and search within them. No point looking at lesser souls and hoping them to covert to a pure soul, just because you have faith in them.  

Thanks for reading this post and keep writing in to us.

6 comments:

  1. Thanks man, I will try catch Big fish instead of trying on small ones.

    ReplyDelete
  2. Sure, you can also look at the Model Portfolio here http://www.stockfundoo.com/p/stockfundoo-model-portfolio.html.

    Look at what kind of companies become Multi-baggers.
    Brands like Liberty, Gitanjali, Brigade;
    Underprices gems like Timbor Homes,
    Performers like Shakti Pumps,
    Steady names in troubled sectors like Spicejet and so on.

    Best of luck in your search and keep writing in to us.

    ReplyDelete
  3. Hi Naren,I would like to know your views on IndiaBulls Real Estate. Do you see other potential multibagger in infra or real estate stocks ?

    ReplyDelete
  4. From my point , only and only "DLF" or "Nitesh Estates" if you wanna take risk.

    ReplyDelete
  5. Hi Naren, I really appreciate your knowledge and the way you present it in your Articles makes it even more interesting. Your view on search for a multibagger is so simple and enlightening. If followed in its true spirit, I am sure it will save many small retailers from being reduced to multibeggars.

    Warm Regards
    SDK Menon

    ReplyDelete
  6. Hi Naren, I really appreciate your knowledge and the way you present it in your Articles makes it even more interesting. Your view on search for a multibagger is so simple and enlightening. If followed in its true spirit, I am sure it will save many small retailers from being reduced to multibeggars.

    Warm Regards
    SDK Menon

    ReplyDelete

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