A multi-bagger stock is a stock that has the potential to return multiple times its initial investment. It can be achieved through high growth potential, strong fundamentals, and undervalue in the market.
A stock with high growth potential means that the company expects to experience significant growth in the future. This potential indicates that the business can increase sales and earnings far more quickly than its competitors or the market as a whole.
Strong fundamentals are a company’s financial and operational metrics that indicate its ability to generate consistent revenue and profits over the long term.
A stock trading below its practical worth is said to have been undervalued in the market. It means the stock trades at a price lower than its intrinsic value, as determined by its fundamentals, growth prospects, and other factors.
It refers to the direction and growth prospects of the company’s industry. A company that operates in a growing industry with an enormous market opportunity is likelier to be a multi-bagger stock than one that works in a stagnant or declining industry.