Multibagger stock: Investing in stocks is similar to investing in a business. According to veteran investor Charlie Munger, by buying a good stock, one should stay in it for as long as possible. Significantly, Charlie Munger is Warren Buffett’s business partner. Through this statement, he wants to make investors understand that investing from a long-term perspective gives better returns. Along with a long term investment strategy, benefits like getting dividends from time to time are also available.
Market experts also say that holding a stock for a long time also helps in reducing the risk. To understand the benefits of long term investment, we can take a look at Rama Phosphates shares. This fertilizer stock has been in the multibagger stock of 2021. During this period it gave 235 percent return to its shareholders. However, this has not been the only year when this multibagger stock has given stellar returns. This stock has a history of delivering great returns.
If anyone would have invested in this stock 1 decade back or sometime back then he has become rich. However, since last 1 month this stock is running under pressure. In the last 1 month, this stock has come down from Rs 400 to Rs 361. It has seen a decline of 10 per cent during this period. This has been a sideways even during the last 6 months. In this period, it has given a modest return of 8 per cent to its shareholders. However, this stock has given alpha returns in the last 1 year. In 1 year it has given a return of 235 percent and it has increased from Rs 108 to Rs 361. At the same time, in the last 5 years, this stock has increased from Rs 75.95 to Rs 362. And has given a return of 380% during this period.
In 10 years this stock has come down from Rs 51 to Rs 362. It has given a return of 610 per cent in 10 years. At the same time, in the last 19 years, this stock has increased from Rs 2 to Rs 362 and has given a return of 18000 percent during this period.
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Now if we look at the share price history of this stock, then if an investor had invested Rs 1 lakh in this stock 1 year ago, he would have been getting Rs 3.35 lakh today. On the other hand, if someone had invested Rs 1 lakh in it 5 years ago, today he would have been getting Rs 4.80. On the other hand, if someone had invested Rs 1 lakh 10 years ago, today he would have been getting Rs 7.10 lakh.
On the other hand, if someone had invested Rs 1 lakh in this multibagger stock 19 years ago, then today he would have been getting Rs 1.81 crore.
Opinions of veterans on the stock
The market giant is still bullish on this stock. Anuj Gupta of IIFL Securities says that the share of Rama Phosphates is in the range of Rs 300-400 in the last 8 months. Long term positive of this stock remains. For any downside, buy the stock with a stop loss of Rs 274 and target short term target of Rs 400-450. At the same time, its medium term target will be Rs 500-550.