Thread - How to spot a potential multibagger
Multiple fundamental parameters however we cannot be rigid on any of these parameters.
Be flexible to interpret things from bigger picture point of view.
Input 1 ~ No doubt on business survival
Come whatever event (health crisis, economic bubbles, economic recessions, political events, etc.), there should not be any doubt on business survival.
Earlier it used to be only food companies into this category, but now there are many.
Input 2 ~ Visible & sustainable growth potential
At any point of time, we can think with a certain common sense approach that if management wants, there can be a sustainable growth at any point of time.
Obviously this growth may come thru innovation, optimization, etc.
Input 3 ~ Management has vision towards growth
Management should be forward looking, should be able to read into future to build right growth avenues, should be considerate towards every stakeholder.
In addition management should be ethical & should have good social image too.
Input 4 ~ Promoter stake
There should be a reasonable skin in the game from promoter.
If in case there is a low promoter stake, then promoter should increase stake at every possible opportunity.
Also pledging should either be zero or minimal.