MULTIBAGGERS - The Quick March Of The Multibaggers

Every investor aspires to have a multibagger in his or her portfolio. One or two such baggers in the portfolio with adequate weightage can lead to huge wealth creation. The problem lies in spotting the multibaggers in advance and betting on the top ones with sizeable capital. Ganesh Vaybase puts under the spotlight multibaggers of the year 2020 while also highlighting the trends in multibagger stocks over the past 10 years and the sectors that have produced the maximum 10 baggers in the past 10 ten years

- Ganesh Vaybase

The current market sentiment is extremely positive even as the DIIs have been selling since the start of the month while FIIs have been net buyers in this period. The global markets are flushed with liquidity and it is expected that the companies in US will deliver strong earnings’ growth this quarter. The IPO markets have also enthused investors by clocking above average listing gains in 2020. In fact, the year 2020 has surprised market participants in the way the markets have staged a V-shaped recovery with the stocks prices. Experts argue that the recovery on ground is not strong enough to justify recovery in stock prices; however, the recovery is definitely better than expected by most investors.

This V-shaped recovery has pushed certain stock prices higher, turning them into multibaggers. Very few would have argued in favour of multibaggers in 2020 after considering the market crash in the first three months of the year. As many as 187 stocks managed to double in 2020 while a good number of 256 stocks delivered returns between 50-100 per cent. As many as 285 stocks cheered investors by generating returns anywhere between 25-50 per cent while 1,259 stocks have yielded positive returns on YTD basis.

These figures are important because in 2018-19 only 64 stocks managed to more than double in the given year while a miniscule 486 stocks managed to generate positive returns. It is worth noting that the Sensex generated positive returns in CY 2018 (7 per cent). On YTD basis, Sensex has not yet turned green in the current year. This goes to show the broader participation of the markets this year, which is keeping the investors happy and providing a chance for the markets to churn out a greater number of multibaggers.