The Mission Marketing Group has been on my monitor for a while, and unfortunately it’s now got away from me.
The price was about 9p when I noticed it, and I hoped that it might fall back a bit. That said, I consider myself a long term investor, and whilst the company looked (looks?) to be good value in the short to medium term, I am not very keen on this type of business as a long term investment.
The price has climbed to around 17p-18p over the last few weeks, but I’ll leave it now rather than chase it.
Another fairly recent miss was Scapa which has also doubled since it made it onto my monitor.
Perhaps I ought to allocate a pot of money for trading purposes?
Question: If you have £10000 to invest, and can keep picking stocks which increase your investment by 50% (i.e. compounding your money by 50%). How many trades would you need to make before you turned that £10000 into over £1,000,000?
Answer: Just 12 would turn your £10,000 into £1,297,463. It’s such a simple bit of mathematics, but even now I find it staggering how quickly relatively small amounts of money can turn into far larger sums through compounding.
In theory then if you put aside £10,000, and invest it in a single company which nets you a 50% profit and then take your £15000 and put it all into another company whose share price accrues by 50% etc and repeat the trick 12 times, you’ll now have a cool £1.3m. In other words, just enough to buy a studio flat in Central London (That bit is supposed to be a joke, but then thinking about it………)
If only it was that easy!!!!!!!!!!!
Interesting Michaelmouse. I've done a lot of multibaggers but the two problems are 1) knowing when to sell and 2) finding stocks that you can safely have a cool half million in. Often you can sell out of a small multibagger only to see it keep rising, in fact that's often the case imo. Additionally, the small penny shares which are likely to multibag are rather dangerous to be in with half a million because you may well be locked in. So it's a matter of spreading them around imo and trying to find lots of little multi-baggers.
ReplyDeleteThat said, what's around today that looks like a small cap multi-bagger in waiting in which you can hold a decent sum?
I think SCPA are probably a multi-bagger still but if I was banking on one I think it would be RED and well worth a look imo.
Redstone (RED) have had 10 years of dire performance but recently things have changed. A new Chairman and CEO have taken a 15% stake. These guys seem to be big figures in the sector and are described as 'serial entrepreneurs' in articles I've seen. They have reduced losses from £8m last year to £1.5m in H1 this year. These two bought £50K worth between them recently and a non-exec also had £50k worth, all buying just 2 months before year end March 31.
They have recently been winning contract after contract having dumped all the low margin businesses they had.
Pure speculation (not from any forecasts) but with losses down to £1.5m in H1 then could they do £1.5m profit in H2 and break even for the year? If so that's an £8m improvement on last year. That might suggest they could do £2.5m in H1 this year and £3.5m in H2 at the current growth rate? £6m profit for the year ahead looks possible (pure speculation) and no tax, in fact they probably have tax credits. All this from a £48m mkt cap co.
Obviously I don't know what they could do, but they have the scope, directors are buying, a changed board and all the low margin rubbish sold off. But in a year's time they might have the scope to be doing £10m profit and getting tax credits on top. Might command a forward PE of 15+ if they are growing that well too. If so I think they could treble in price over 12 months.
Again, it's pure speculation but with the penny multi-baggers I think you have to look at what might be achievable at the current momentum. There's never decent broker coverage and it's all a bit of a leap of faith but I rarely see little penny stocks that have all the changes, director buying and contrac wins that RED have so to me these look like the most likely rapid multi-bagger I can find at the moment.
Good blog - I see you have edcrane following you too - we're all birds of a feather :-)