Best Multibagger Stocks to Invest in #ShareMarket | Fundamental Analysis | How to Select Stocks?

Summary

The video script is an educational guide on stock market investment, emphasizing the importance of self-education over blindly following tips. It introduces a systematic approach to fundamental analysis using a Google Sheet and Ticker Tape, focusing on key financial ratios like P/E, market cap, total assets, and debt-equity ratio. The speaker illustrates how to filter and analyze stocks, highlighting the significance of company holdings, promoter pledges, and institutional investments. The script concludes with an assignment for viewers to analyze and select top companies for investment, encouraging independent research and critical thinking in stock selection.

Takeaways

• 📈 The importance of self-education in stock market investing is emphasized, comparing it to learning to fish rather than relying on others to give you a fish.
• 🔍 The speaker uses a Google sheet to demonstrate the process of analyzing stocks, suggesting a systematic approach to investment decisions.
• 📊 The script introduces the concept of using 'ticker tape' to fetch data on various stocks, highlighting the utility of tools in stock analysis.
• 💡 It's crucial to understand financial terms such as market cap, PE ratio, total assets, current assets, current liabilities, and debt-equity ratio when analyzing stocks.
• 🧐 The PE (Price to Earnings) ratio is explained, and it's noted that a lower PE ratio is generally better for a company, with historical context also important.
• 💼 The market cap is described as the cost of purchasing the entire company, with its calculation based on the number of shares and their closing price.
• 🏦 The debt-equity ratio is highlighted as a critical metric, with companies having less debt relative to equity being more desirable.
• 📊 The Compound Annual Growth Rate (CAGR) over the last 5 years is mentioned as a key indicator of a company's growth trajectory.
• 📉 The script warns against investing in companies with negative CAGR or high debt-to-equity ratios, as these could indicate financial instability.
• 📝 The process of exporting data from the ticker tape to a Google sheet for detailed analysis is outlined, showing the practical steps in stock evaluation.
• 📈 The speaker assigns 'homework' to encourage viewers to practice stock analysis themselves, reinforcing the idea of self-reliance in investment decisions.

Q & A

What is the main message the speaker is trying to convey about investing in the stock market?

The speaker emphasizes the importance of self-education and analysis before investing in the stock market, rather than blindly following someone else's advice or tips.

Why does the speaker compare investing knowledge to learning how to fish?

The analogy of learning to fish illustrates the idea that one-time assistance (like receiving a fish) is less valuable than gaining the skill to fish for oneself, which applies to investing by being able to analyze and make informed decisions continuously.

What tool does the speaker use to analyze stocks, and why is it significant?

The speaker uses Google Sheets and Ticker Tape to analyze stocks. It is significant because it allows for a detailed examination of various financial metrics and ratios, which aids in making informed investment decisions.

What is the importance of the Price-to-Earnings (P/E) ratio in stock analysis?

The P/E ratio is important as it indicates the market's valuation of a company's earnings. A lower P/E ratio generally suggests that the stock is undervalued, making it potentially a better investment.

How does the speaker define the 'Market Cap to Total Assets' ratio, and why is it useful?

The 'Market Cap to Total Assets' ratio is defined as the market capitalization of a company divided by its total assets. It is useful for identifying companies that have a lower market cap relative to their asset value, which could indicate undervalued stocks.

What is the significance of the Debt-to-Equity ratio in evaluating a company's financial health?

The Debt-to-Equity ratio indicates the proportion of equity and debt used to finance a company's assets. A lower ratio suggests that the company relies more on equity financing, which is typically healthier and less risky than high debt levels.

Why is the Compound Annual Growth Rate (CAGR) a critical factor to consider when analyzing stocks?

The CAGR is critical as it provides a measure of a company's growth over a specified period. A positive and significant CAGR indicates that the company has been growing consistently, which is a positive sign for potential investors.

What does the speaker mean by 'Rocket Shares' and why are they significant?

The term 'Rocket Shares' is used metaphorically to describe stocks that have the potential for rapid growth. They are significant because identifying such stocks before they rise can lead to substantial investment returns.

How does the speaker suggest analyzing the holdings of a company to assess its investment potential?

The speaker suggests looking at the holdings of promoters, mutual funds, domestic institutions, and retail investors. High promoter holdings that are not pledged, along with significant institutional investments, can be positive indicators of a company's potential.

What homework does the speaker assign to the audience, and what is its purpose?

The speaker assigns the homework of analyzing the 4400 companies mentioned and selecting the top five they would invest in, along with their reasons. The purpose is to encourage the audience to apply the analysis techniques discussed and to deepen their understanding of stock evaluation.

What advanced techniques does the speaker mention and how might they be explored further?

The speaker mentions that there are advanced techniques they use for stock analysis but does not detail them in the script. They suggest making a future video to explore these techniques further and encourages feedback from the audience to guide the content of that video.

Outlines

00:00

📈 Stock Market Investment Strategy and Analysis

The speaker emphasizes the importance of self-education in stock market investing, comparing it to learning to fish rather than relying on others' tips. They introduce a step-by-step guide to analyzing stocks, starting with understanding the basics such as market cap, PE ratio, and total assets. The speaker uses a Google sheet to demonstrate how to filter and analyze data from 4410 companies listed on the stock market, focusing on key financial metrics and ratios to identify potential investments.

05:08

🔍 Deep Dive into Financial Ratios and Company Valuation

This paragraph delves deeper into the financial analysis of companies, explaining the significance of market cap, PE ratio, and the relationship between a company's market value and its actual asset value. The speaker discusses the debt-to-equity ratio, highlighting companies with low or no debt as more financially stable. They also touch on the importance of a company's compound annual growth rate (CAGR) as an indicator of its growth potential, and demonstrate how to export and analyze this data using a Google sheet.

10:14

📊 Advanced Filtering Techniques for Stock Selection

The speaker introduces advanced filtering techniques to narrow down the list of potential investments. They create a new ratio, 'Market cap to total assets,' to find companies with a market cap lower than their total assets, indicating undervalued stocks. The paragraph also covers the importance of a positive CAGR, and the use of filters to exclude companies with negative growth or high debt-to-equity ratios. The speaker provides examples of how to apply these filters to identify promising stocks for investment.

15:14

🚀 Identifying Multibagger Stocks and Analyzing Share Performance

The speaker discusses the concept of multibagger stocks, which are shares that have the potential to provide high returns. They provide an example of a stock that has significantly increased in value over a short period and caution against making investment decisions without thorough research. The paragraph also covers the importance of analyzing a company's holdings, including promoter holdings and the presence of institutional investors, as indicators of a stock's potential.

📚 Homework Assignment and Encouragement for Independent Analysis

In the final paragraph, the speaker assigns a homework task to the audience, asking them to analyze the 4400 companies discussed and select their top five choices for investment, explaining their reasoning. This exercise is meant to encourage viewers to apply the analysis techniques taught in the video. The speaker also invites viewers to comment on their choices and promises to create more advanced analysis videos based on audience interest.

Keywords

💡Invest

To invest means to allocate money or capital with the expectation of generating income or profit. In the video script, the concept of investing is central to the discussion on stock market participation. The speaker emphasizes the importance of not just following tips but understanding the process of investment, such as analyzing stocks before putting money into them.

💡Penny Stocks

Penny stocks refer to low-priced, small-cap stocks that are generally considered high-risk investments due to their low trading volume and price volatility. The script mentions identifying penny stocks as part of the investment strategy, indicating the need for careful analysis before investing in such stocks.

💡Fundamental Analysis

Fundamental analysis is a method of evaluating a company's financial health and performance by examining its financial statements, management, competitive position, and other factors. The video script discusses this analysis as a crucial step in the investment process, with the speaker guiding viewers on how to perform such analysis using various financial metrics.

💡Google Sheet

A Google Sheet is an online spreadsheet program that allows users to create, edit, and collaborate on spreadsheets in real-time. In the context of the video, the speaker uses a Google Sheet to demonstrate how to organize and analyze data about different companies for investment purposes.

💡Ticker Tape

A ticker tape, in the context of stock trading, refers to a record of stock prices that are updated in real-time. The script mentions using ticker tape to fetch data for stock analysis, indicating its use as a tool for obtaining up-to-date financial information on companies.

💡Market Cap

Market capitalization, or market cap, is the total market value of a company's outstanding shares of stock. The video script discusses market cap as a key metric in evaluating a company's size and as part of the fundamental analysis process, using it to compare with the company's total assets.

💡Price-Earnings Ratio (PE Ratio)

The price-earnings ratio, or PE ratio, is a valuation ratio calculated by dividing the market value per share by the earnings per share (EPS). It is used to determine if a stock is overvalued or undervalued. The script explains how to calculate the PE ratio and its importance in stock analysis.

💡Debt-to-Equity Ratio

The debt-to-equity ratio is a financial leverage ratio that measures the proportion of a company's financing that comes in the form of debt versus equity. In the script, the speaker highlights the significance of this ratio in assessing a company's financial risk, with a preference for companies that have a lower ratio.

💡Compounded Annual Growth Rate (CAGR)

The compounded annual growth rate (CAGR) is the rate of return that would be required for an investment to grow from its initial to its final value, assuming all income was reinvested. The video script uses CAGR as an indicator of a company's growth over the past five years, which is an important factor in investment decisions.

💡Multibagger

A multibagger is a term used in stock markets to describe a stock that has the potential to provide high returns, often doubling or tripling the investment. The script mentions looking for multibagger stocks by analyzing their financials and other factors, which is part of the investment strategy discussed.

💡Holding

In the context of stocks, 'holding' refers to the ownership stake in a company held by different entities such as promoters, institutional investors, or retail investors. The script discusses the importance of analyzing the holdings of a company to understand the confidence of different investor types in the company's prospects.

Highlights

The importance of learning to analyze stocks independently rather than relying solely on others' tips.

Introduction to using Google Sheets for detailed stock analysis with specific matrices.

Utilizing Ticker Tape to fetch data on various stocks for analysis.

How to select stocks from different indices like Nifty 50, Nifty 100, and Nifty 500 for analysis.

Importance of examining a company's sector, market cap, closing price, and price-earning ratio.

The significance of a company's total assets, current assets, and current liabilities in the analysis.

The role of the debt-equity ratio in evaluating a company's financial health.

How to calculate the price-earning ratio and its implications for stock valuation.

Understanding market cap and its calculation based on share price and the number of shares.

The concept of market cap to total assets ratio and its use in identifying undervalued stocks.

Filters for selecting stocks with a positive PE ratio, indicating profitability.

Importance of a company's Compound Annual Growth Rate (CAGR) over the last 5 years.

How to export data from Ticker Tape to Google Sheets for further analysis.

The process of filtering stocks based on the market cap to total assets ratio and other financial metrics.

Evaluating a stock's potential as a multi-bagger by analyzing its historical performance.

Assessing the holdings of promoters, mutual funds, and institutional investors for insights into a stock's credibility.

The impact of pledged promoter holdings on a company's perceived stability.

Analyzing a company's financials, including revenue and profit before tax, for signs of growth or decline.

The assignment of analyzing 4400 companies and selecting the top five based on the learned analysis techniques.

Encouragement to share the video to spread knowledge about home-based stock analysis.

Transcripts

When you all want to invest in the stock market but in which stock we should invest how do

identify penny stocks. Listen to someone's advice and invest money. Invest money on someone's

tip. I always tell you to learn to catch fish. Somebody will give you a fish once. Maybe

your stomach will be filled only once. If you know how to fish, you can catch fish every

day. That means I am vegetarian still I'm saying. You don't have to worry about anyone's

tip that if anyone recommends us then we will buy it. It's better to analyze itself.

So you will learn this today and what I analyze first before investing in any stock I will

tell you that also. What we are going to do you already know that there is 4000 companies

listed in the stock market so we are going to analyze every company. We are going to

do one analysis at a time. How will we do it and what do we use and what approach do

we use. So for that, I have to take you to my Google sheet. And we will tell you in detail all

of the matrix which I follow before investing in any stock. Now, I will take you to my Google

sheet and here we go. For analysis, we are going to use ticker tape. We have come to

ticker so what we are going to do is we simply go to stocks cleaner how do we fetch data

I will tell you each and everything. You first come to the stock universe. Here you see 4410

stocks are there for which you can do analysis. If you want to analyze nifty 50 and Nifty

100, in fact, Nifty500 you can select here. We have taken both of the cases we have taken

nifty 500 and stocks too. I will tell you what are we going to do. Here is the name of the company

and in which sector it is dealing and the market cap of the company. Here is the closing

price earning ratio. Apart from this, what else do we need, I am also telling you that. I

also want the total assets of the company here. So I will select total assets here,

for example, I want company current assets so I can select from here current assets and

if I want current liabilities here then I can also find that one important thing we

need to consider is the debt-equity ratio so I will click on that that equity ratio

too. Also, I need a cagr of the last 5 years that what is the compound growth rate of the

company so I selected that too now see we have selected so many things here and if you

want you can also choose another there are many filters here. And when you go to add

filters you will see a lot of things you can use many filters here according to profitability

price and volume and financial ratios you can use many filters. There are tickertape

special filters also like fundamental score or earning quality rank so you can also use

that but now I am going to tell you what I use now in front of us! We are looking at the

all companies there are 4410 companies. You can see the name of the company here, the

sector is visible. The market cap is visible. The closing share price is visible. The price

to earning ratio is visible. price to earning ratios are also visible and how can we

calculate that it is very simple. I will divide closing price by Earning per share

which gives the price-earning ratio. If we have a price earning ratio for example like

Reliance has a closing price of rupees 2620 and if we divided it by 36.11 so the price

earning ratio will be 72.57. Here we need to see companies' total assets. The company

here it's more than 17 lakhs crore. The market cap of the company is 1773846 now what

is the market cap let's assume if you want to purchase the whole company so how much

will you pay for that.How much money will you have to pay if you want to buy Reliance

Industries? Market cap will let us know.One more thing is how the market cap comes out,

that too you should understand. If you are watching the price then the market cap changes

daily. So the number of shares multiplied by the closing price every multiplied closing

price multiply by number of shares then we will get market cap but if we want to calculate

no. of shares you will see here 1773 846.58÷2620.6 the number of shares will be 676.87 crore shares.

You should know how to calculate no. of shares we are doing it for fundamental analysis I

hope you understood the PE ratio now. The lower the pe ratio the better if

it is 36 now and if it would become 25 you have to see historic pe also. Time being the

lower the PE ratio the better is for the company. Now come to market cap if you want to buy

a company you have to pay 1773 846.58.In return for which you feel that the company has around

13 crores 20 lakhs assets.So you are buying something for 1700000, in which there are

assets of actual value. If you want to sell a company then the assets of the company will

be sold it is written 1320000 crores after including all asset. The cost of many machines

is put. Now it can be more or less. Let the machinery be taken for two crores. And there

seems to be depreciation too. It may also happen that today it will not be sold for two crores.Ultimately

he got less than 13 lakh crores. But 13lakh crore asset of the company.if it is at the

market cap of 17 lakh crore so here just think in this way.If the market cap of the company

is one lakh crore. Meaning it will be available in one crore. And if he has 1000000 crores

asset today?You would say this could be great, is there such a company?I am taking more time

because I am trying to explain. There are many such companies whose market cap may be less

but assets are more. The shares of that company can go up very fast, so today we will talk

about it. Now I have to look at companies current asset here what this current asset

means is what is available to him on today's date like cash.Whatever machinery and infrastructure

companies, the total will be accounted for. will not be in current. Current Liabilities,

What is the liability of the company? You can see that the company has around 270000

current liabilities. now debt to equity ratio is highly important why is it important? How

much debt has been taken by the company in comparison with equity? Now if the debt is

showing as 33, TCS is showing eight. you will see 2 as well for many other companies. now

for example Hindustan Unilever's debt to equity is zero.The company has no debt, which is

a very good thing.If we look at the debt-equity ratio, then a general company is considered

good, which has less than two or two and a half years.If it is 1 o less than 1 then it

is very good and if it is zero then there is nothing better than that, Now we will see

here is a compounded Annual Growth of 5 Years. We want that too. in the case of Hindustan

Unilever it is showing as 17 which means Growth is coming well. and in the case Of reliance.

Equity debt is high, but the company is doing well to grow. Its compounded annual growth

rate is high. What are we going to do now we simply go to excel and we export data?

You can also change the name here. if I export here then it gets downloaded. I have

opened the google sheet already all these 4000 stocks are visible here. now we are going

to do Analysis here. You will be seeing a lot of data. But don't panic after seeing

this data. We are going to do a good analysis. I'll make you understand one by one. Let us

simplify this first. So You should not have trouble understanding him. Just one more second.

so now you are looking at the figures. there are so many stocks so you must have trouble

understanding. So here We look at something that I look at first and that I will tell

you. I just look at the market cap of the company. Accordingly, I see the asset of the

company. So I'm going to do something interesting so you will also do it we will create a new

row here and name it 'Market cap to total assets. I'm going to take out a new ratio.

I'll calculate it out in front of you. now we have simplified the work for you. So what

have we done? we saw the company's market cap and how many assets does the company have?

So we going to talk about more parameters what do I want, I want the company to have

more assets and have less market cap. I simply put a filter here we will select them and

will create a new filter. I'm putting greater than 1 in the P/E ratio because you will see

that the P/E ratio of some companies is negative. After all, they are loss-making companies

that is why we have mentioned a greater than 1 here. so now what we are going to do is place

them in ascending order. we have done a very small job. We have placed the market cap or

The total asset ratio is placed in ascending order. The market cap of the company is around 11 crore and

has assets of more than 3800 crores. And the company has a P/E ratio of 1.57 close price

means it is 4rs per share and the debt to equity ratio is not seen which means data is not

available on ticker tape company has total assets of approx 1800 core and current liabilities

of approx 2300 crore. and the company has no Compound annual growth rate. why is it

necessary to see this altogether Our decision-making will be easy. If CAGR is negative it means

the Company is not growing. So we put one more filter here as we don't want to see this as

negative we will also keep this greater than 1. because we have to invest money in the

the growing company itself. you can also keep more significant than 5. The company should have an

the annual growth rate of at least 5%. Now you see this company EXAMPLE JUMBO Which is a

packaging company. Which has a market cap of 3.64crorese. And total assets are

98.97, price earning ratio is 3.64 crore. Well, even then things were not bad.

But like I saw debt-to-equity ratios of 139 crores So all my analysis stopped for the

company because According to me the debt to equity ratio should be less than 2.5. I'll

put you here between 0 and 2.5. After applying the filter Many companies have come in front

of you. There is 347 company. Now even after this, our analysis is not complete .now

you are looking at the company's P/E ratio which is 162 or 5 too. We can then reduce

the range as much as you need. let us take this company is Essai India capital limited.

We will select and go to the ticker tape website what analysis are we going to do next, let

me tell you. you would say that you should release the video of the year 1 month ago?

Right now you are seeing a share of Rs 127. but this share was not even half the rate

a month ago. Two months ago this share was Rs 17.70 in February. We are looking for the

share of Multibagger in this way. I'm not saying to buy any shares I'm not giving you

any recommendations. after this, we go to holdings. Two or three things are important

here. promoter holding is 73.72 but here promoter holding is pledged. the promoter is raising

money from the market in exchange for shares is not a good point. So significant

portion of the promoter's holding is pledged which is a negative point. You have to see

this too. Thereafter there is no holding of the mutual fund. The holding of domestic institutions

is 2.93% and the folding of retail investors is 23.35% so we need to see this thing too.

If you see any good stock. Right now I am not taking the names of any stock. Well, I

am telling you this that find us find such a stock in which domestic Institutions mutual

funds and foreign institutional investors have not invested any money. If you identify

before that, then it is Rocket Shares. If it is good, if you get a negative here, then

I would not say to invest in it. it is not a stock recommendation. But after that, I

will go into financials after. Financials matter to me. So the revenue of the

company, we can see the revenue? The revenue of the company was 211 crore and became 101

crores. Right now the revenue is falling. PBT you can see 48 crores 41crore or 8

crores so what has happened basically that suddenly the revenue and profit before tax

has significantly gone down. Something wrong with the company. Shares can be multi-bagger but you need to see and

you need to do a detailed analysis. Here you have the option of many stocks. I told you

what are the things we are seeing on the base level? if I do an analysis next, then the company

will come to the forefront and you will invest its money. As far as I have

explained to you how to do fishing? If you have learned to catch fish, then catch the

fish yourself. You can do the same analysis in nifty 500. Now you must be thinking that

I have recommended such companies. The analysis should be your own. Apart from this, there

is another parameter that I see. You should also see a lot of companies come after

you put the filter here. After that, there are many more things. which you have to analyze.

Before that we go ahead, You even learn to do analysis.

Taught you in this video the basics of Fundamental Analysis. Apart from this, there are advanced

techniques that I follow. I will make a video on

that too, but the request came only then. If you want you can comment. I will try to make

a video too.As far as what you have learned from the analysis or not, how will I know?

I am giving you the homework. Analyze till here, according to you, We have analyzed 4400

companies. To tell us according to you the five top companies in which you choose to

invest and why you have chosen this. From just we will come to know how seriously you

watch our videos. So other people who will have your comment,

they know. You have researched these companies and those people will also start researching

about those companies. Before analyzing before research we should not invest any money. So

the link for the ticker tape is in the description box you can simply go to take a take and start

analyzing. Now finally if you are watching this video

on Facebook follow and if you're watching it on YouTube do subscribe to

this channel and press the bell icon. I will see you in

the next video do share this so that people will come to

know how they will analyze stocks or shares sitting at home even. So share this video

I will see

in the next video tell the time you self-made.