(2) Reasonable Debt Level
It is one of the best ways to identify & pick multi-bagger shares or equities. A company with either no debts or reasonable debt levels is a necessary characteristic in researching high quality multibaggers.
You can identify genuine multi-bagger stock only if it is found to have strong balance sheets i.e. debt is less than 30% of equity.
A company with high debts on its balance sheet will have to pay the major proportion of its quarterly profits towards interest. A company which is growing its annual earnings by large amount will have same rate of growth in its book value also.
If Earning Per Share (EPS) of a share is growing at 30% annually then probably you are very much close to finding a genuine multibagger stock.
[Read Also: 25 Basic Rules For Investing Money In Stock Markets]
(3) Good Quarterly Performance (Revenue/EBITDA)
It is one of the authentic ways to identify and pick multibagger stocks. An equity can become super returning equity only if it’s quarterly performance of revenue, EBITDA and net profit is excellent & beating the stock analyst’s expectations.
The company’s operating performance of such highly speculative stock should clearly reflect in its multiples. A company which is outperforming at operational level can result in significant upside in its share price.
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