Here are top ten multibagger low-beta stocks in last two years; Brightcom Group gains over 1,460 per cent!
Low-beta stock does not see a sharp movement or wealth erosion even if the market becomes volatile.
In the world of investing, volatility is the key. Investors are reminded of this whenever there is a downturn in the broader market and individual stocks are more volatile than the other, resulting in enormous swings in price.
Volatility is an indicator of risk. In general, the higher the volatility, the riskier the portfolio or the stock is. The volatility of a security or portfolio relative to its benchmark is called beta.
To reiterate, beta is a number, which describes the movement or volatility of that stock in comparison to the broader indices. For example, if a stock has a beta of one, then its movement is almost similar to that of Sensex. However, if it is greater than one (for instance, two, then it gives around two times’ the return than the broader indices. Similarly, if the stock’s beta is less than one (say, 0.5) then, it will inch higher by approximately 50 per cent less than that of the broader indices. Here, one should note that stocks having beta greater than zero usually move in the direction of the broader market i.e., if the market inches higher, the stock also goes up and vice-versa.
Low-beta stock does not see a sharp movement or wealth erosion even if the market becomes volatile. Given the fact that the markets are expected to remain volatile due to factors like inflation, commodity prices and central bank actions provide major cues for sharp movements in both ways.
Here is the list of top ten multibagger ">Multi-bagger low-beta stocks in the last two years:
(Note: We have considered stocks that have a beta equal to or less than 0.5 from Nifty 500 universe).
Do you hold any low-beta stocks in your portfolio?