Coffee can investing is the “buy and forget” approach to investing. It is a low-risk strategy to build enormous wealth over a period of time. Investors buy a variety of stocks that have performed consistently and stay invested in them for a long period, say ten years, to be able to generate multibagger returns.
The stocks mentioned in this list satisfy three important criteria.
- First, they have a market capitalization of more than ₹ 1000 crores.
- Second, they have had revenue growth of at least 10% year on year (Yoy) for the last ten years.
- Third, they have a return on capital employed of more than 15%. Based on these parameters and after checking the fundamentals of the companies, investors choose such stocks for coffee can investing.
Here are three midcap stocks that fit the coffee can investing criteria:
Aarti Industries Ltd
Aarti Industries is a leading manufacturer of speciality chemicals and pharmaceuticals in India and it has a global footprint. It has a market capitalization of ₹ 25,081 crores and its shares closed at ₹ 691.90 apiece on Friday.
In the past ten years, its shares have given multibagger returns of 2938.46%. Therefore, If an investor would have invested ₹ 1 lakh in the shares of the company ten years ago, the value of their holdings would have been ₹ 30.38 lakhs today!
The company’s sales recorded a year-on-year growth of more than 10% for the past ten years. Its sales grew from ₹ 1,449 crores in 2011 to ₹ 7,000 crores in 2022. It has an excellent return on capital employed of 22.37% and an ideal debt-to-equity ratio of 0.37.
Coforge Ltd
Coforge is an IT services company that provides end-to-end software solutions and services. Formerly known as NIIT Ltd, it is among the top 20 Indian software exporters. It has a market capitalization of ₹ 22,780 crores and its shares closed at ₹ 3732.45 apiece on Friday.
In the past ten years, its shares have given multibagger returns of 1235.64%. Therefore, if an investor would have invested ₹ 1 lakh in the shares of the company ten years ago, the value of their holdings would have been ₹ 13.35 lakhs today!
The company’s sales recorded a year-on-year growth of more than 10% for the past ten years. Its sales grew from ₹ 232 crores in 2011 to ₹ 6,432 crores in 2022. It has an excellent return on capital employed of 24.54% and an ideal debt-to-equity ratio of 0.13.
SKF India Ltd
SKF India is a leading supplier of products and services like rolling bearings, seals, mechatronics, and lubrication systems. The company has a market capitalization of ₹ 23,191 crores and its shares closed at ₹ 4,332.70 apiece on Friday.
In the past ten years, its shares have given multibagger returns of 574.00%. Therefore, if an investor would have invested ₹ 1 lakh in the shares of the company ten years ago, the value of their holdings would have been ₹ 6.74 lakhs today!
The company’s sales recorded a year-on-year growth of more than 10% for the past ten years. Its sales grew from ₹ 2435 crores in 2011 to ₹ 3666 crores in 2022. It has an excellent return on capital employed of 27.56% and the company is almost debt-free with a debt-to-equity ratio of 0.00.
Written by Simran Bafna
Disclaimer
The content in this news article is not investment advice. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution while investing or trading in stocks. Dailyraven Technologies or the author are not liable for any losses caused as a result of the decision based on this article. Please consult your investment advisor before investing.
