Manish Goel stock bottomed out around 17.50 apiece in February to March 2009 due to global economic slowdown selling pressure.
Multibagger stock: To make wealth from stock market investments, one needs to understand that it’s a broker who becomes rich when you trade. So, it’s always advisable to buy a stock for the long term and avoid intraday trading. The majority of the top stock market investors we follow are investors who have amassed enormous wealth by investing, or holding a stock for as long as they can. For example, Warren Buffett purchased Coca-Cola stock thirty years ago and continues to hold this beverage stock.
“If you came into Stock Markets to make wealth, it can only be made through long-term value investing/fundamental investing in small-cap stocks and mid-cap stocks,” says value investor Manish Goel. Manish Goel, on the other hand, maintained that finding an undervalued stock is a difficult task.
“Always invest according to the fair value of the stock and avoid considering irrelevant criteria like 52-week low, down from 52-week high, strong technical support, etc,” Manish Goel says of when to buy and how long to hold stock. Manish Goel stated, “If the share is trading below its fair value, buy it; if the share is trading above its fair value, sell it.”
We need to look at Maithan Alloys shares to see how this fair value stock picking’ technique pays off for a long-term stock market investor. The stock is now traded on both the BSE and the NSE, but it was previously only available on the BSE. After a slowdown in 2008-09, this chemical stock reached a low of around 17.50 per share in 2009, and it has since risen to 918 per share on the BSE.”
Bonus share history for Maithan Alloys
However, a long-term investor in this multibagger chemical stock received one more benefit. This chemical stock traded ex-bonus in both 2010 and 2015. So, if an investor had believed in bottom fishing during the global economic slowdown of 2008-09, he or she would have received two additional share benefits. According to the BSE website, Maithan Alloys shares traded ex-bonus on June 17, 2010, for the issuance of bonus shares in a 1:2 ratio. This means that for every two shares held by eligible shareholders, one bonus share was awarded.
Similarly, on July 15, 2015, Maithan Alloys shares traded ex-bonus for the issuance of 1:1 bonus shares, which means that one bonus share was awarded for each share held by the company’s eligible shareholders.
The effect on investment
If a bottom-fishing investor had invested 1 lakh in this multibagger stock when it bottomed out in 2009, he or she would have received 5,714 company shares. After the issuance of 1:2 bonus shares in 2010, these 5,714 Maithan Alloys shares would have increased to 8,571 shares. When the company issued 1:1 bonus shares in 2015, these 8,571 shares increased to 17,142 shares.
₹1 lakh turns to ₹1.57 crore
In the previous week, the share price of Maithan Alloys was around 918 per share. So, if an investor had invested 1 lakh in this stock 14 years ago during the bottom fishing following the global economic slowdown in 2009, that 1 lakh would have grown to 1,57,36,356 or 1.57 crore.
This 1.57 crore does not include interim and final dividends declared by the company during the period.