Dipan Mehta on consistent compounders and multibaggers
Dipan Mehta, Director, Elixir Equities, says “in capital goods, there are at least four or five good stocks in which we and our clients have invested. You hold them long enough, 3 years, 5 years, 10 years, who knows, they could turn out to be multibaggers. The key thing about this thing is that when you invest in a stock, do not think it is going to be a multibagger, just hope for consistent earnings.”
Sometimes after existing quietly for 5-6 years, we realise some stocks have just taken a giant leap forward like Escorts, Raymonds, Tube Investments, CG Power. Tell us about the next ones now.
You talk about a sector, and I will give you a few ideas, not recommendations.
Investors can do their own due diligence and buy. In capital goods, there are at least four or five good stocks in which we and our clients have invested. You hold them long enough, 3 years, 5 years, 10 years, who knows, they could turn out to be multibaggers.
The key thing about this thing is that when you invest in a stock, do not think it is going to be a multibagger, just hope for consistent earnings.
If companies can compound earnings by even 17-18% or so, for an extended period of time, then you have a multibagger in your investment holdings. This is true of the last so many stocks that I have seen for the last 10-15 years or so. The critical thing is to remain invested and ride through the turbulence because these are not debt products and they do not have a simple secular cash flow; there are ups and downs.
