Multibagger Stock: To make money from investing in the stock market, one needs to understand that when you trade it is the broker who becomes rich. Hence, it is always advised to buy stocks for long term and avoid intraday trading. Most of the big investors in the stock market that we follow are investors and have made huge amounts of money through investing i.e. by 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.
According to value investor Manish Goyal, “If you have come to the stock market to create wealth, it can only be created through long term value investing/fundamental investment in small-cap stocks and mid-cap stocks.” However, Manish Goyal said that finding an undervalued stock is not an easy task.
When to buy and for how long should one hold a stock, Manish Goyal answers, “Always invest as per the fair value of the stock and consider irrelevant parameters like 52-week low, below 52-week high, strong technical support Avoid doing, etcetera.” Manish Goyal said that if the stock is trading below the fair value then buy it and if the stock is trading above the fair value then sell it.
To understand how this ‘fair value stock picking’ technique pays off for a long term stock market investor, we need to look at Maithon Alloys shares. The stock is available for trading on both BSE and NSE but initially it was available only on BSE. This chemical stock made its lowest level after the slowdown in 2008-09 17.50 per share level in 2009 and today this multibagger stock has grown to 918 per share level on BSE.”
Maithon Alloys Bonus Share History
However, there is one more advantage that long-term investors can get in this multibagger chemical stock. This chemical stock has traded ex-bonus in 2010 and 2015 as well. Therefore, if an investor who believed in bottom fishing at the time of global economic meltdown in 2008-09 would have got the benefit of two bonus shares. As per information available on BSE website, Maithon Alloys shares went through ex-bonus trading on June 17, 2010 for issue of bonus shares in the ratio 1:2. This means, the eligible shareholders of the company were given one bonus share for every two shares held by them. Similarly, on July 15, 2015, shares of Maithon Alloys traded 1:1 ex-bonus to issue bonus shares, which meant that one bonus share was given for every share held by eligible shareholders of the company. .
Had an investor who believed in bottom fishing invested 1 lakh in this multibagger stock in 2009 when it bottomed out, he would have got 5,714 shares of the company. These 5,714 Maithon Alloy shares would have increased to 8,571 shares after the issue of 1:2 bonus shares in 2010. Later, when the company issued 1:1 bonus shares in 2015, these 8,571 shares increased to 17,142 shares.
becomes 1 lakh 1.57 crore
Maithan Mishra share price closed around 918 per share level on Friday last week. So, if an investor had invested 1 lakh in this stock 14 years ago during bottom fishing after the global economic recession in 2009. becomes 1 lakh 1,57,36,356 or 1.57 cr.
This 1.57 crore does not include the interim and final dividend declared by the company during the period.
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