Finding Multibagger Stocks: Mohnish Pabrai is called the Warren Buffett of India. This is because he has built a portfolio of more than Rs 1,185 crore by following the methods of billionaire investor Warren Buffett. Obviously, he has some magic that enables him to do this. Warren Buffett is an example of how the stock market can be milked. He has mentioned in many interviews and seminars how he made so much money. Many of his statements are as true as Brahmavakyas from the point of view of the stock market, such as – if you want to make money in the stock market, then you should be afraid when people are greedy, and when people are afraid, you should become greedy.
Today we are talking about Mohnish Pabrai. He too has made thousands of crores of rupees by following Warren Buffett. He has recently shared a formula, which can prove to be a Brahmastra for any investor. If you find even one or two companies out of thousands of companies listed in the Indian stock market that meet this criterion, then consider yourself lucky. So let’s know what that criterion or formula is.
low priced stocks
Mohnish Pabrai did not give any suggestion to anyone to invest money, but he told how he himself chooses companies. He told that he looks for such companies whose stock price is very low, but the company’s earnings are good. Note that here ‘low price’ does not mean penny stocks of 2-4 rupees. It means that the valuation of the companies is good, but the stock price is comparatively low. So how will this be known?
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Actually, there are some indicators in the market that tell the story of the company and the stock. One such indicator is P/E. This is a ratio that almost every big investor looks at before buying a stock. It is generally said that stocks with a P/E around 20 are good. But Pabrai says that he prefers to invest in stocks that have a low P/E ratio.
What does P/E mean?
This is called the price to earning ratio. Going into too much technical definition can confuse you. So you can understand the matter in one sentence – If a company earns the same amount as its market cap in just 1 year, then the price to earning (P/E) ratio will be 1. If it does it in 2 years, then it will be 2. If it earns the same amount as its market cap in 5 years, then the P/E ratio will be 5.
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Mohnish Pabrai says that he buys only undervalued companies. Companies that have a low P/E ratio. This means that the companies in which he invests have good earnings and grow very fast. If the company grows fast, the share price will also go up at a fast pace. Pabrai invested in Rain Industries when its revenue was $2 billion (2,000,000,000) and its market cap was $200 million (200,000,000). Revenue was more than the market cap. Overall, this share was available for a pittance at that time. Pabrai took great advantage of this.
Which stocks have low P/E right now
According to Screener (screener.in), these stocks are currently trading at a very low P/E. Note here that we are not advising you to invest in these stocks. If you want to invest, then you should consult your broker or a certified expert. Because the investment decision is not based on the P/E ratio alone. So here are the stocks with low P/E ratio-
– Maha Rashtra Apx- 0.62
– Athena Global – 0.73
– Dhoot Industrial Fin – 1.28
– Vipul Limited – 1.78
– Key Corp – 3.41
– Swadeshi Polytex – 5.24
(Disclaimer: This news has been published for information purposes only. If you want to invest in any of these stocks, then first consult a certified investment advisor. AyraNews24x7 will not be responsible for any kind of your profit or loss.)
Tag: Stock Market
first published : August 7, 2024, 12:17 IST
