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  1. #11
    Guru
    Join Date
    Sep 2009
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    2,815

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    One way of doing it
    https://www.livewiremarkets.com/wire...erm=10-BAGGERS
    "How to spot a 10-bagger (and the next ASX darling that could be headed for the moon)"
    "The ASX's next great 10-bagger
    According to Prunty, small caps are the best hunting ground for 10-bagger stocks - mostly, because they need the space to grow. Other than being a small cap, there are two other filters that investors should use, being companies with earnings and solid competitive advantages.

    "10-baggers are not as speculative as they might first appear," he argues.

    "They have identifiable business models. Of the businesses on that list, almost all of them had revenues and earnings - so you didn't need to take a massive leap of faith on the business model."
    "So there is some value in the phrase "let your winners run". "

    When it comes to competitive advantage - businesses need a "secret sauce" that will help them grow their earnings consistently over long periods of time - whether it be something unique about the business model or its management. "
    ""It's the leader in their field and it's a massive market. They're already growing their revenues at a rate which, if sustained, will mathematically get them to that 10-bagger status," Prunty says.
    Taking the list above as inspiration, Prunty argues that the success of these businesses has been driven by "fundamentals" or earnings performance. So, if investors are assessing whether a busy can become a 10-bagger, they need to ask themselves the following question:

    Is this business growing its revenues at a double-digit rate and can it sustain that growth for a very long time?
    For a business to be able to sustain this type of growth, it needs a competitive advantage."
    ""It also needs a big enough market to grow into so you're not running up against growth constraints. The good thing for Life360, in particular, is it has a very significant number of users who are not paying for the service," Prunty explains.

    "So there are two levers of growth - one is getting unpaid users to pay and the other one is international expansion beyond North America.""

    PS :Note the PE ratio's
    If you're looking for "value investments " you're looking in the wrong place
    Last edited by kiora; 24-01-2024 at 09:31 AM.

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