High Return Stocks
Introduction to High Return Stocks
High return stocks are companies which have gained significantly in a short or long term time frame. There is no fixed threshold of return which is considered to be a benchmark for high return stocks, any stock that has recorded annual returns of over 20% can be considered as a high return stock.
Key Features of High Return Stocks
High Growth
High return stocks are characterized by a big share price appreciation.
Fundamentally Strong
High returns generally translate to fundamentally strong companies. Such companies would have a track record of industry standard beating revenues, profits and margins.
Capable Management
One of the key identifiers of a high return stock is a management that is competent and trustworthy. A decent management team is critical for a company’s stock to be a high return one. This is because it is the management that skillfully drives the business operations of a company, generally resulting in share price appreciation for the stock.
Details of Top High Return Stocks
Some top high return stocks which have delivered significant returns in recent years are TCS, Reliance and HDFC Bank among others.
TCS
TCS can be considered as a high return stock and it can be gauged from its share price performance. Since its listing, the TCS share price has appreciated by a mammoth 2,502%
HDFC Bank
The leading private sector bank in India HDFC Bank has all the attributes to be designated as a high return stock. Since its listing the HDFC Bank share price has appreciated by a gigantic 30,000%, leading to massive shareholder wealth creation.
Reliance
Reliance is one of the foremost names among Indian conglomerates. The company’s share price has increased by 4,315% since it got listed in the stock exchanges.
How to analyze high return stocks?
Financials
To effectively analyze any stock, let alone penny stocks, one should have a deep understanding of the financials of a company. In the case of penny stocks, the importance of analyzing the financial position of the company increases as these stocks are not that much in the limelight.
Beware of stock operators
Sometimes stock operators - a group of individuals who pump in large amounts of money and take one particular share to fresh highs only to dump all shares.
Valuation
Check if the stock’s PE ratio is within industry standards for that particular sector to justify your investment.|
Who should invest in High return stocks?
High return stocks may be ideal for growth-oriented, long-term, and risk-tolerant investors seeking higher potential returns.