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Welcome to Episode #291 of the Zacks Market Edge Podcast.
Every week, host and Zacks stock strategist, Tracey Ryniec, will be joined by guests to discuss the hottest investing topics in stocks, bonds and ETFs and how it impacts your life.
This week, Tracey is going to solo to talk about how investors can find their next 10-bagger stock.
What’s a 10-Bagger?
A 10-bagger is an investing term first used by famed Fidelity mutual fund manager, Peter Lynch, in the 1980s and 1990s.
It describes a stock that returns a 1000%. That would entail an investor buying a stock at $10 and watching it go to $100, for example.
In the 1980s, it meant buying a company with growth but that was also fairly cheap on a valuation basis.
In the last decade, both Tesla and Netflix were 10-baggers.
How to Find 10-Bagger Stocks
You can’t screen for 10-baggers. You just have to get lucky.
It could mean that you were a parent in the 1970s and took your kids to McDonald’s (MCD - Free Report) all the time and decided to buy the stock.
Or it could mean you lived in suburban Chicago in the early 1990s, when a coffee chain from Seattle named Starbucks (SBUX - Free Report) opened up nearby. You loved it so much that you bought some shares when it went IPO.
But one of the hallmarks of 10-baggers is to buy early on in its history as a public company.
Tracey also likes companies with strong consumer brands.
Buying the IPO
2021 is the hottest year for IPOs since 1999.
Could a future 10-bagger be among them?
1. Portillo’s (PTLO - Free Report) , a popular Chicago restaurant chain that specializes in Italian beef and has a famous chocolate cake. It doesn’t yet have positive earnings. Could it be the next Chipotle or McDonald’s?
2. Olaplex (OLPX - Free Report) is a haircare company with a big following. It’s products, including shampoo and conditioners, are used in salons and sold on its website and also at Sephora, Nordstrom and Bloomingdales. It actually has positive earnings and is expected to make $0.31 this year. Could it be the next big beauty brand?
3. 1stdibs.com (DIBS - Free Report) is an online marketplace for design. It includes furniture, antiques, art, home décor, jewelry and watches. It’s used by many interior designers. It went IPO in June 2021 and is expected to grow revenue by 21% in 2021. Niche online marketplaces, such as Etsy, have seen big growth in the last few years.
What else do you need to know about finding the next 10-baggers?
Tune into this week’s podcast to find out.
[In full disclosure, Tracey owns shares of SBUX in her personal portfolio. No, she didn’t buy at the IPO.]
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How to Find Your Next 10-Bagger Stock
Welcome to Episode #291 of the Zacks Market Edge Podcast.
Every week, host and Zacks stock strategist, Tracey Ryniec, will be joined by guests to discuss the hottest investing topics in stocks, bonds and ETFs and how it impacts your life.
This week, Tracey is going to solo to talk about how investors can find their next 10-bagger stock.
What’s a 10-Bagger?
A 10-bagger is an investing term first used by famed Fidelity mutual fund manager, Peter Lynch, in the 1980s and 1990s.
It describes a stock that returns a 1000%. That would entail an investor buying a stock at $10 and watching it go to $100, for example.
In the 1980s, it meant buying a company with growth but that was also fairly cheap on a valuation basis.
In the last decade, both Tesla and Netflix were 10-baggers.
How to Find 10-Bagger Stocks
You can’t screen for 10-baggers. You just have to get lucky.
It could mean that you were a parent in the 1970s and took your kids to McDonald’s (MCD - Free Report) all the time and decided to buy the stock.
Or it could mean you lived in suburban Chicago in the early 1990s, when a coffee chain from Seattle named Starbucks (SBUX - Free Report) opened up nearby. You loved it so much that you bought some shares when it went IPO.
But one of the hallmarks of 10-baggers is to buy early on in its history as a public company.
Tracey also likes companies with strong consumer brands.
Buying the IPO
2021 is the hottest year for IPOs since 1999.
Could a future 10-bagger be among them?
1. Portillo’s (PTLO - Free Report) , a popular Chicago restaurant chain that specializes in Italian beef and has a famous chocolate cake. It doesn’t yet have positive earnings. Could it be the next Chipotle or McDonald’s?
2. Olaplex (OLPX - Free Report) is a haircare company with a big following. It’s products, including shampoo and conditioners, are used in salons and sold on its website and also at Sephora, Nordstrom and Bloomingdales. It actually has positive earnings and is expected to make $0.31 this year. Could it be the next big beauty brand?
3. 1stdibs.com (DIBS - Free Report) is an online marketplace for design. It includes furniture, antiques, art, home décor, jewelry and watches. It’s used by many interior designers. It went IPO in June 2021 and is expected to grow revenue by 21% in 2021. Niche online marketplaces, such as Etsy, have seen big growth in the last few years.
What else do you need to know about finding the next 10-baggers?
Tune into this week’s podcast to find out.
[In full disclosure, Tracey owns shares of SBUX in her personal portfolio. No, she didn’t buy at the IPO.]