In this post we discuss what multibagger stocks are and how you can identify them to create wealth.
What are multibagger stocks?
This term was coined by legendary American fund manager Peter Lynch in his 1988 book 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.
For example, a ten bagger is a stock which gives returns equal to 10 times the investment, while a twenty bagger stock gives a return of 20 times. MRF for example, gave 1651% returns between June 2001 and April 2018 – it can be referred as a 17-bagger stock.
- What are multibagger stocks?
- Top multibagger stocks for 2022
- Top multibagger stocks for the past decade
- And finally, The 100-baggers
- Characteristics of top multibagger shares
- The Bajaj Finance story
- The Astral story & our experience
- How to spot potential multibagger stocks
- Future multibagger stocks for next 10 years
- List of smallcap multibagger stocks for 2023
- List of multibagger penny stocks for 2022
Top multibagger stocks for 2022
|Name||1Yr returns %||CMP Rs.|
|M K Proteins||1618.34||775|
|Bombay Super Hyb||1613.05||602.3|
|S & T Corporatio||1030.77||59.8|
|Ascom Leasing &||616.81||324|
|M B Agro Prod.||549.75||625.25|
Top multibagger stocks for the past decade
|BERGEPAINT||Berger Paints||2268%||Paints & Varnish|
|CANFINHOME||Can Fin Homes||1643%||Finance|
Multibagger stock Ajanta Pharma & our experience
In 2012 when I first stumbled across Ajanta Pharma, I was drawn to it purely by its numbers. It had excellent financials, but I had no clue on what it did. Looking up in the Internet revealed it’s a pharmaceutical company (yes, you can tell that by the name) that produces a herbal preparation for kids named “Pinkoo Gripe Water” and sells anti-malarial drugs in Africa. Didn’t ring any bells, but after hesitating for few days I bought some shares of the company in September 2012. Subsequently, I added some more over the next two months (probably after bit more reading).
Between September 2012 – when I bought my first share of Ajanta Pharma, and May 2017 – when I sold my last bit– the stock had went up by an astonishing 1361%.
And finally, The 100-baggers
ITD returns of best multibagger stocks based on 10Y performance:
Characteristics of top multibagger shares
The Bajaj Finance story
Today it stands out as one of the largest and fastest growing deposit taking NBFC in India with a diversified portfolio of financing businesses covering Retail, SME Rural & Commercial.
Since its IPO listing in FY95, the stock has multiplied by an astounding 124,450%. A casual 1 lakh rupees invested in the IPO is now worth around 1200 crores! (Feel free to double check the number of zeros when you have time 😊)
The Astral story & our experience
Astral Limited is a prime example. The company is primarily engaged in manufacturing of plumbing & drainage systems, fittings and adhesive solutions. Roughly 77% of its business comes from Pipes & Fittings, while Adhesives accounts for the rest.
We had identified Atral almost a decade back. It used to be known as Astral Poly Technik then. Within one year the stock went up by approximately 5 times!
Schooled in the principles of traditional value investing, we exited the stock considering it to be over-valued, waiting for a suitable opportunity to re-enter after correction! As you can imagine, it has been a rather long and frustrating wait 😊
How to spot potential multibagger stocks
The usual starting point is to screen the traded stock universe by applying filters in-line with the criteria mentioned before. This will give us an initial list, which can be digged in further.
We look for a highly profitable business with strong cash-flows and low debt that is maintaining a consistent but high growth rate.
Future multibagger stocks for next 10 years
|Name||CMP Rs.||MCAP Rs.Cr.||FCF 5Yrs Rs.Cr.|
|Guj. Themis Bio.||634||921.08||30.45|
List of smallcap multibagger stocks for 2023
Shivalik Bimetal Controls Ltd
The company’s main products are Thermostatic Bimetal /Trimetal strips and SMD/ Shunt Resistors.
Company also manufactures Reflow Solder/Pre-soldered Strips, Precision Stainless Steel, Thermostatic Bimetal Coils & Spring, Snap Action Disc, etc.
The shunt resistors division of the company is completely new and was started 4-5 years back by the company.
DHP India Ltd
The Company’s main products are regulators, hose assemblies and brass fittings. As of FY22, appox. 87% of its sales came from exports while 13% came from domestic market.
Company caters to customers majorly from aerospace, defence and healthcare sectors.
Rajratan Global Wire Ltd
Its products are used primarily in automobile, aircrafts, construction and engineering industries.
List of multibagger penny stocks for 2022
KMC Speciality Hospitals Ltd
The company is in the business of running a super specialty hospital having 175 beds with team of dedicated specialists and state-of-the-art equipment. They cater to key specialty areas such as Neurosurgery, Cardiovascular & thoracic surgery, Orthopedics, Plastic and Reconstructive Surgery, Gynecology, Neonatology and Nephrology (including renal transplants).
M K Exim (India) Ltd.
As of FY21, finished fabrics constituted 42% of its sales, while cosmetic distribution contributed to 58%. 64% of total revenues came from domestic market while 36% was exports (FY21).
As Lynch says, you only need a few big winners !
All you need for a lifetime of successful investing is a few big winners, and the pluses from those will overwhelm the minuses from the stocks that don’t work out.
Legendary American Investor and Fund Manager
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