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.
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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.
We have shared three key principles from Jeff so far. As a brief recap, we are looked at companies that have recurring revenue, an expanding growth runway and a powerful moat protecting its business. The three traits form a solid foundation for a desirable company to hold for the long term.
But there is one more trick up our sleeve in our quest to separate the best from the rest.
Principle #1: Predictable or Recurring Revenue – click here
Principle #2: Expanding Market Opportunities – click here
Principle #3: Evidence of a Competitive Moat, and Financial Resilience – click here
Principle #4: Modest Decision Threshold
In looking at our very best investments over the past 20 years at the Motley Fool, we’ve realised that many of them are obvious “first choices” for the customers using them.
It is not hard to decide to shop with Amazon.com (NASDAQ: AMZN), or to order streaming content from Netflix (NASDAQ: NFLX). If you pay by credit, it’s usually using Visa (NYSE: V) or MasterCard (NYSE: MA).
Any business that makes itself an easy “first choice” for its customers has a big advantage over competitors. When you stop and think about it, these companies are rare and should be paid even closer attention to.
Towards a strong finish…
The four principles above form the rock-solid foundation of a company that could have the potential to double in value. To wrap it all up, we have the final principle that deals with the stock’s valuation.
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 them.
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 Amazon, Visa and Mastercard. The Motley Fool Singapore writer Chin Hui Leong owns shares in Amazon, MasterCard and Netflix.