How to find the next big smallcap multibagger stock? Out of the 40...
Rohan Das@rohaninvestor
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Aug 20, 2024
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How to find the next big smallcap multibagger stock?
Out of the 40 small-cap multibagger stocks I studied, 16 common factors led to returns of 20x, 30x, and even 50x:
Please bookmark this thread 🧵
Out of the 40 small-cap multibagger stocks I studied, 16 common factors led to returns of 20x, 30x, and even 50x:
Please bookmark this thread 🧵
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(1) Cheap Valuations:
- Price-to-Earnings (P/E) ratio was below 20.
- Price-to-Book (P/B) ratio was under 2.
- PEG ratio was under 1.5
- Price-to-Earnings (P/E) ratio was below 20.
- Price-to-Book (P/B) ratio was under 2.
- PEG ratio was under 1.5
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(2) Small Size:
- Market Capitalization was less than ₹3,000 crore.
- Market Capitalization was less than ₹3,000 crore.
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(3) Promoter ownership:
- Promoter ownership greater than 60%
- Some insider buying
- Promoter ownership greater than 60%
- Some insider buying
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(4) Good Returns:
- Return on Capital Employed was above 20%
- Return on Equity was more than 15%.
- Return on Capital Employed was above 20%
- Return on Equity was more than 15%.
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(5) Manageable Debt:
- Debt-to-Equity ratio was below 1.5
- ICR was greater than 3
- Debt-to-Equity ratio was below 1.5
- ICR was greater than 3
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(6) Cash Reserves:
- Companies had plenty of cash on balance sheet.
- Companies had plenty of cash on balance sheet.
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(7) Strong Cash Flow:
- Cash flow from operations was higher than their net profit.
- Cash flow from operations was higher than their net profit.
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(8) Extra Features:
- Sales were greater than the company's market cap.
- Sector was growing.
- Sector was out of favour due to headwinds.
- Company has a competitive edge in the industry
- Sales were greater than the company's market cap.
- Sector was growing.
- Sector was out of favour due to headwinds.
- Company has a competitive edge in the industry
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Thread #185
If you found this useful:
(1) Follow @rohaninvestor for more such threads.
(2) Check out our YouTube channel for quality information, find future multibaggers, and grow your knowledge.
youtube.com/@rohaninvestor…
If you found this useful:
(1) Follow @rohaninvestor for more such threads.
(2) Check out our YouTube channel for quality information, find future multibaggers, and grow your knowledge.
youtube.com/@rohaninvestor…