What is a multi-bagger stock?

What is a multi-bagger stock?

Multibagger stocks are equity shares of a company that generate returns multiple times higher than its associated cost of acquisition.

The term was coined by Peter Lynch in his 1988 book "One Up on Wall Street" .

So for example if a stock gives you twice the returns then it is a two-bagger, if it gives you thrice the returns then a three-bagger or four-bagger, so and so forth.

These stocks are not picked on the basis of the nature of the company or its valuation;these stocks are undervalued with great fundamentals and high growth potential waiting to be discovered by the investors.

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