handpicked Multibagger Stocks for 2012:-
While reading top 5 fund managers of all time,came across of idea of investing
by John Neff.
Neff focused on companies with low price-earnings ratios (P/E ratios) and strong dividend yields. He sold when investment fundamentals deteriorated or the price met his target price. The psychology of investing was an important part of his strategy.
He also liked to add the dividend yield to the growth in earnings and divide this by the P/E ratio for a “you get what you pay for” ratio. For example, if the dividend yield was 5% and the earnings growth was 10%, then he would add these two together and divide by the P/E ratio. If this was 10, then he took 15 (the “what you get” number) and divided it by 10 (the “what you pay for” number). In this example the ratio is 15/10 = 1.5. Anything over 1.0 was considered attractive.so we made a fundamental scan of nifty 500 stocks and got 18 stocks that fulfill above rule.
Here we selected stock with PE ratio below 10,must having Dividend yield minimum 3%(same around your saving bank rate) and having this financial year EPS growth above 30%!!as John Neff’s you get what you pay for” ratio must be above 1,all this stock fulfill that condition.so investors must add following stock sin there portfolio as they
are mutibaggers for next 5 years view!!
| Company Name | Price-Earnings Ratio |
EPS Growth | Dividend Yield |
| Allahabad Bank | 5.2 | 10.89 | 3.18 |
| Corporation Bank | 4.23 | 16.98 | 4.67 |
| Guj Inds. Power | 6.12 | 56.17 | 3.66 |
| I O B | 6.14 | 33.52 | 5.29 |
| IDBI Bank | 5.85 | 17.48 | 3.31 |
| Indian Bank | 5.74 | 10.65 | 3.14 |
| Jyoti Structures | 3.62 | 20.11 | 3.5 |
| Oil India | 8.35 | 10.78 | 3.03 |
| Oriental Bank | 6.17 | 13.9 | 4.06 |
| Paper Products | 8.31 | 34.31 | 3.34 |
| Rolta India | 4.13 | 38.07 | 3.69 |
| Rural Elec.Corp. | 7.75 | 28.9 | 3.47 |
| Sona Koyo Steer. | 7.02 | 71.15 | 5.29 |
| SRF | 3.45 | 59.11 | 5.65 |
| St Bk of Bikaner | 4.84 | 20.52 | 3.5 |
| Supreme Petroch. | 7.41 | 44.3 | 6.16 |
| Syndicate Bank | 5.22 | 17.24 | 3.14 |

