Warren Buffett usually says “if you aren’t thinking about staying invested in a stock for ten years, don’t even think about owning it for 10 minutes.” And this is true to a great extent as staying invested in the equity market for the long term increases the chances of generating massive returns.
Compounded annual growth rate (CAGR) is used to measure how well a business is performing in a fiercely competitive market. It takes into account the time for which one has remained invested in an asset. A high CAGR means that a company’s returns have grown consistently.
Here are three mid-cap stocks that have given high CAGR returns over the past 10 years:
Supreme Industries
Supreme Industries is a leading plastic products manufacturer in India. It operates in various categories like plastic piping systems, cross-laminated films & products, protective packaging products, industrial moulded components, moulded furniture, storage & material handling products, performance packaging films, composite LPG cylinders and so on.
The company’s shares were trading at ₹ 370 levels ten years ago. They were trading at ₹ 3414 apiece during early trades on Thursday, translating to a CAGR of 24.88 percent!
It is also seen that the shares have given multibagger returns of 822 percent in the past ten years. Therefore, if an investor would have invested ₹ 1 lakh in the company’s shares 10 years ago, the value of their holdings would have been ₹ 9.22 lakhs today!
Supreme Industries is a mid-cap stock with a market capitalization of ₹ 41,124 crores. It has an ideal 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 47.53, which is higher than the industry P/E of 16.24, indicating that the stock might be overvalued as compared to its peers.
APL Apollo Tubes
APL Apollo Tubes is a leading manufacturer of branded steel products in India. Its manufacturing facilities churn out over 1,500 varieties of MS black pipes, galvanised tubes, pre-galvanised tubes, structural ERW steel tubes and hollow sections to serve industry applications like urban infrastructures, housing, irrigation, solar plants, greenhouses and engineering.
The company’s shares were trading at ₹ 17 levels 10 years ago. They were trading at ₹ 1358 apiece during Thursday’s intraday trades, translating to a CAGR of 54.97 percent!
It is also seen that the shares have given multibagger returns of 7888 percent in the past ten years. Therefore, if an investor would have invested ₹ 1 lakh in the company’s shares 10 years ago, the value of their holdings would have been ₹ 79.88 lakhs today!
APL Apollo Tubes is a mid-cap stock with a market capitalization of ₹ 36,531 crores. It has an ideal return on equity of 23.52 percent and an ideal debt-to-equity ratio of 0.29. Its shares were trading at a price-to-earnings ratio (P/E) of 56.67 which is higher than the industry P/E of 12.94 indicating that the stock might be overvalued as compared to its peers.
KEI Industries
KEI Industries manufactures cables and wires, with a product portfolio ranging from housing wires to Extra High Voltage (EHV) cables, and further diversifying into the Engineering, Procurement, and Construction (EPC) services for power and transmission projects.
The company’s shares were trading at ₹ 10 apiece 10 years ago. They were trading at ₹ 2462 apiece during Thursday’s intraday trades, translating to a CAGR of 73.43 percent!
It is also seen that the shares have given multibagger returns of 24520 percent in the past ten years. Therefore, if an investor would have invested ₹ 1 lakh in the company’s shares 10 years ago, the value of their holdings would have been ₹ 2.46 crores today!
KEI Industries is a mid-cap stock with a market capitalization of ₹ 21,835 crores. It has an ideal return on equity of 20.21 percent and an ideal debt-to-equity ratio of 0.06. Its shares were trading at a price-to-earnings ratio (P/E) of 45.83, which is higher than the industry P/E of 28.19, indicating that the stock might be overvalued as compared to its peers.
Written by Simran Bafna
Disclaimer
The views and investment tips expressed by investment experts/broking houses/rating agencies on tradebrains.in are their own, and not that of the website or its management. 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.
