Recently, the shares of Billionaire investor Warren Buffett-led Berkshire Hathaway scaled to a record high of $ 5,55,800.00 per share, after its operating profit rose above 10 billion for the first time. Berkshire Hathaway is the most expensive stock in the world and its share price has increased by more than 56 thousand percent since its listing.
Buffet often says, “If you aren’t willing to own a stock for 10 years, don’t even think about owning it for 10 minutes.” Such is the power of remaining invested for the long term.
Similarly, the shares of many Indian companies have rewarded shareholders with multibagger returns over the long term. One such company is Supreme Industries.
Supreme Industries is a leading plastic products manufacturer in India with 25 manufacturing facilities spread across the country. The company operates in various product categories viz. plastic piping systems, cross-laminated films & products, protective packaging products, industrial moulded components, moulded furniture, storage and material handling products, performance packaging films and composite LPG cylinders.
The company’s share price increased by a massive 30348 percent in the past twenty years, as its share price increased from ₹ 13.50 apiece to ₹ 4070.00. If an investor had invested ₹ 1 lakh in the company’s shares twenty years ago, the value of their holdings would have been ₹ 3.01 crores today!
The stock is a multibagger in a five-year and a one -year period as well. Its share price increased from ₹ 1191.80 apiece to the current level, giving multibagger returns of 241.50 percent. In the past year, its share price increased by 114.89 percent from ₹ 1894.00 per share.
With a market capitalization of ₹ 48,920 crores, Supreme Industries is a large-cap company. It has a high return on equity of 20.99 percent and an ideal debt-to-equity ratio of 0.01. Its shares were trading at a price-to-earnings ratio (P/E) of 56.43, which is higher than the industry P/E of 17.04, indicating that investors are willing to pay a higher price for the company’s future earnings. Moreover, it has a dividend yield of 0.68 percent.
The company’s promoters hold a 48.85 percent stake in it, followed by foreign institutions with 19.06 percent, retail investors with 15.24 percent, mutual funds with 15.00 percent and other domestic institutions with 1.85 percent.
Written by Simran Bafna
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