Penny stock: Suzlon locks at upper circuit; is it start of multibagger journey or hints of repeating history?
The majority of the market participants believed that the stock just underwent a warm-up during that period and it is still far away from its hay days.
There was a time when the stock of Suzlon was the pride of investors’ portfolios as the company operated in the niche segment and was redefining the way sustainable energy sources are harnessed across the world.
This favourite stock of traders & investors was at its pinnacle as it quoted at Rs 459.80. The stock had moved nearly 296 per cent from the lows of 2005 to the peak of 2008, which was seen in the month of February.
The majority of the market participants believed that the stock just underwent a warm-up during that period and it is still far away from its hay days. However, what followed thereafter was a terrifying sight as the stock entered into a secular downtrend. The market cap of the stock eroded 90 per cent from its peak and that too, in a matter of just 10-11 months.
Coming back to 2021, the stock is seeing good buying demand today as it got locked at the upper circuit limit of Rs 7.65 on NSE.
Once again, the mass on D-street is chattering about this stock and many retailers believe that this is the next big multibagger to watch out for! The reason behind this tittle-tattle is the retailers’ fancy investing in stocks that trade below Rs 20 (penny stocks) and also because, at the peak, the stock has seen the levels of Rs 459.80. So, there is a perception that even if the stock touches Rs 100, which is one-fourth of its peak price of 2008, this stock would be a 10X bagger.
So, now, the question arises that would this be a case of committing the same sins over and over or, will it be a different experience this time?! Only time would tell that but in any case, we would like to advise our readers to invest in a business that they understand.