Multibagger Manish Goel stock turns ₹1 lakh into ₹1.57 crore in 14 years
Multibagger stock: To make wealth from stock market investments, one needs to understand that it’s broker who becomes rich when you trade. So, it’s always advisable to buy a stock for long term and avoid intraday trading. Majority of the ace investors of stock market whom we follow are investors and they have created whopping amount of wealth through investing i.e. holding a stock as long as they can. For example, Warren Buffett bought Coca Cola stock thirty years ago and he is still holding this beverage stock.
As per the value investor Manish Goel, “If you came into Stock Markets to make wealth, it can be made only through long term value investing/fundamental investing in small-cap stocks and mid-cap stocks.” However, Manish Goel maintained that finding an undervalued stock is not an easy task.
On when to buy and how long one should hold a stock, Manish Goel answers, “Always invest according to the fair value of the stock and avoid considering irrelevant criteria like 52-week low, down from 52-week high, strong technical support, etc.” Manish Goel said that if the share is trading at less than its fair value, then buy it and if the share is trading above its fair value, then sell it.”
To understand how this’ fair value stock picking’ technique pays for a long term stock market investor, we need to look at Maithan Alloys shares. The stock is available for trade on both BSE and NSE but initially it was available on BSE only. After slowdown in 2008-09, this chemical stock made its bottom around ₹17.50 apiece levels in 2009 and today this multibagger stock has risen to the tune of ₹918 per share levels on BSE.”
Maithan Alloys bonus share history
However, there is one more benefit that a long term investor enjoyed in this multibagger chemical stock. This chemical stock has traded ex-bonus in 2010 and 2015 as well. So, if an investor who believed in bottom fishing at the time of global economic slowdown in 2008-09, he or she would have got two bonus share benefits as well. As per the information available on BSE website, Maithan Alloys share traded ex-bonus 17th June 2010 for issuance of bonus shares in 1:2 ratio. This means, one bonus share was awarded to the eligible shareholders of the company for each two shares they held. Similarly, on 15th July 2015, Maithan Alloys shares traded ex-bonus for issuance of 1:1 bonus shares, which means one bonus share was award for each share held by the eligible shareholders of the company.
If an investor, who believed in bottom fishing, had invested ₹1 lakh in this multibagger stock in 2009 when it bottomed out, he or she would have got 5,714 company shares. These 5,714 Maithan Alloys shares would have surged to 8,571 shares after issuance of 1:2 bonus shares in 2010. Later on, when the company issued 1:1 bonus shares in 2015, these 8,571 shares would have surged to 17,142 shares.
₹1 lakh turns to ₹1.57 crore
Maithan Alloys share price ended at around ₹918 per share levels on Friday in the week gone by. So, if an investor had invested ₹1 lakh in this stock 14 years ago during bottom fishing post-global economic slowdown in 2009, one’s ₹1 lakh would have become ₹1,57,36,356 or ₹1.57 crore.
This ₹1.57 crore doesn’t include interim and final dividends that the company has announced over the period.
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Ganesh
http://ganesh@finplay.inFinance enthusiast, Mutual fund expert.