Multibagger Stock: Despite the global economy feeling uncertain over the heat of the COVID-19 pandemic, some stocks have managed to deliver great returns to investors who believe in holding a stock for as long as possible. But, going deeper into the last 5 years, one would realize that the money is not in buying and selling but in holding as it enables a stock market investor to beat the major benchmark returns by a huge margin. . However, one must remember that a long-term investment strategy is good for quality stocks with zero debt and high alpha.
Religare Broking has listed 5 stocks where companies have zero debt (as on FY2011) but have generated higher returns (alpha) than the benchmark in the last 5 years:
1]Divi’s Laboratories: This pharma stock listed on NSE has given multibagger returns to its investors in last 5 years beating NSE Nifty returns by a huge margin in this period. In the last 5 years, NSE Nifty has given around 107 percent returns while the share price of Divi’s Laboratories Ltd has risen by approx. from 1160 4,751 per share level, registering a growth of about 309 per cent over the period. So, Zero Debt Company earned almost 200 per cent higher returns than NSE Nifty in the last 5 years.
2]Infosys: Over the past five years, this IT stock has grown from approx. from 495 1,738 per share level, an increase of about 251 percent. This IT company is also a zero debt company in the last 5 years and has generated almost 144 per cent higher returns than the returns given by the 50-stock index Nifty.
3]Tata Consultancy Services or TCS: This is another large-cap IT company stock with zero debt and high alpha feature. In the last 5 years, the share price of TCS has grown by approx. from 1100 3641 on the NSE, giving the Nifty nearly 124 per cent decline in the period, giving about 231 per cent return to its shareholders.
4]Indraprastha Gas Limited or IGL: It is fueled by oil and gas stocks from 173.69 505.50 per share level in the last 5 years, giving a return of 191 percent to its shareholders. So, the stock of this debt-free company has given 84 per cent higher returns than Nifty 50’s return of 107 per cent during this period.
5]Hindustan Unilever Limited or HUL: This Consumer Goods Company Has Grown From Pass from 817 At the level of 2348.50 in the last 5 years, it is giving about 178 per cent return to its shareholders, which is 71 per cent higher than the Nifty 50 index return in the same period. This company is also a debt free company which has given higher returns than the benchmark index.
Disclaimer: The views and recommendations given above are those of individual analysts or broking companies and not of Mint.
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