Turnaround Stocks can be future multibaggers. The million dollar question is how to find or identify them. In this video, i have explained how you can find out Turnaround Stocks that can be future multibaggers.
The first step is to check the cash flow. If the cash flow of the company turns positive from negative then it is initial signal to identify Turnaround Stocks. Company’s cash flow can become + wither by reducing expenses or increasing revenue. Company may sell its asset.
The second step is company generates operating profit or turn EBIT +ve. Besides that you can also check the P/B, P/E and EPS of the company to identify Turnaround Stocks.
The companies who changed their business strategy can also become future multibaggers. By changing business strategy company identifies areas of future growth potential. Another signal is change in management of the company. Leadership is crucial to turnaround the company.
On top of all the steps, there should clear indication that company is trying to fix the issues faced and is taking necessary steps to correct the pain points.
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