Multibagger is a stocks with strong fundamentals, promising growth prospects, cheap valuations and potential to generate multiple returns in the near future. These stocks have potential to grow revenue exponentially, has sustainable and scalable business model, operates in a sunrise industry, caters to new shift in consumer preferences or causes a disruptive innovation. These type of stocks usually outpace the market return with their impressive returns.
It is not easy to identify a multibagger stock. One should track the market deeply and patiently and whenever a good bargain is found, one should thoroughly research it. The company should be strong on fundamentals and financials with good track record of management, growing business prospects, dividend payout record, cheap valuations and continued generation of cash flows.
