(12) High Gross Margins
It is one of the best ways to identify & pick multi-bagger shares or equities. An equity can give higher returns only if it has very high gross margin in its business activities.
A high rate of return signifies the high growth environment for the company. This condition is again fulfilled by companies that have innovative products & services.
When products & services of such companies reach broader markets then their growth potential also increases tremendously.
(13) Revenue Disproportionate Of Fixed Assets
It is one of the authentic ways to identify and pick multibagger stocks. Companies that have annual revenues irrespective of their fixed assets have higher chances of better valuations in market.
Initially, they have very high fixed assets as compared to their turnover but later they may push towards generating revenues without increasing installation cost.
However, if fixed assets are attracting very high rate of depreciation then it may be cheaply valuated in terms of stock price. But, once they focus on increasing their sales, their share price multiplies very fast.
Image Source: Shutterstock