Every investor would love to see the stock they own double in value. But a 100% gain does not happen overnight.
For instance, shares of taxi operator ComfortDelGro Corporation Limited (SGX: C52) have delivered total returns of 200% for investors. But the returns occurred over a period of a decade.
At the basic level, the example above tells us two things: first, we have to find the right company to buy. Then, we have to have the resolve to hold the company for the long-term, through the thick and thin.
Finding the courage to hold, though, is not as simple as it looks.
Courage, Principles, and Multibaggers
Our analyst team works closely with fellow analysts and investors from our Motley Fool headquarters. One of whom we’ve had the pleasure of working with is Jeff Fischer.
Jeff Fischer has a long tenure with The Motley Fool. He first started writing online for the Fool in 1996. Today, we would like to help you, our fellow investor, with five principles that we have gleaned from Jeff’s decades of writing.
On that note, we discussed the attractiveness of recurring or predictable revenue (that’s Principle #1) yesterday. But that alone is not enough.
The next desirable trait to have is a runway that is meaningful for the company to continue its growth…
Principle #1: Predictable or Recurring Revenue – click here
Principle #2: Expanding Market Opportunities
Not only do we want to invest in predictable revenue but we also want our companies to enjoy an expansive opportunity to keep growing.
The companies we buy must have a multibillion-dollar market opportunity ahead of them and that opportunity should appear poised to grow further for years. This way, our companies only need to capture a fraction of the growing market to succeed and the sky is the limit.
Online advertising is still only a sliver of total advertising dollars spent around the world, so giants like Google have much more room to grow. Cash still accounts for some 80% of consumer transactions, so credit card giants have much more market share to take – in an expanding global economy as well.
More to come…
The first two principles form a solid base of a strong company to hold.
But the third principle will further strengthen the company’s investment thesis by seeking a protective moat around its stream of revenue and profits. Check back tomorrow to find out more.
Before I sign off, I am proud to share that our stock recommendation service, Stock Advisor Singapore, has uncovered two companies that have delivered 100% returns in less than two years. And these two multi-bagging stocks have Jeff’s principles written all over it.
Their names, including the full research reports, are available inside our flagship stock recommendation service Stock Advisor Singapore. In fact, we have over 30 stocks ready for you to consider buying now.
Click here to find out how you can get access today.
The information provided is for general information purposes only and is not intended to be personalized investment or financial advice. The Motley Fool Singapore has recommended shares of Alphabet. The Motley Fool Singapore writer Chin Hui Leong owns shares in Alphabet.