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An ISM and MICMAC Approach for Modelling the Contributors of Multibagger Stocks

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Abstract

The purpose of this study is to explore the factors affecting the selection of multibagger stocks in the securities market. Further, the study aims to develop a model using interpretive structural modeling (ISM). Thereafter, the driving and dependence power of factors was found using matriced impact croises multiplication appliquee a un classement (MICMAC). A group of financial analysts and academic experts having experience in dealing in the Indian securities market were consulted and interpretive structural modelling (ISM) is adopted to develop the contextual relationship among various factors for each dimension of multibagger stocks selection. Further, to identify the driving and the dependence power of factors, the results of the ISM are used as an input to MICMAC analysis. The results of the study indicate the large potential market (C11), visionary leader (C13), unique business model (C6), understanding of the sector (C1), and promoter and management capability (C2) are the dominant factors. MICMAC analysis indicates that driving, dependent and linkage factors are 4, 5, and 4 respectively. The factors obtained for ISM model development and MICMAC analysis are based on the experts’ opinions. As it is a subjective judgment, there are chances of biasness on basis of personal opinions. A questionnaire survey can be conducted to gather viewpoints on these factors from more financial experts and portfolio consultants. The study has been executed in discussion with financial analysts and academic experts having experience in dealing in the securities market. Hence, derived results have practical validity. The securities market is quite volatile in nature and the right choice of multibaggers may prove to be wealth creators for the general public. Investors may look for the derived factors for investing their savings into profitable channels by picking up those stocks which may prove to be multibaggers in near future. The development of a model for the identification of factors affecting the choice of multibaggers in the securities market is the original contribution of the authors.

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Notes

  1. RETURNS, I. Value Investing in Growth Companies.

  2. https://www.moneycontrol.com/news/business/markets/identifying-multibaggers-how-to-pick-stocks-that-can-double-your-wealth-3343091.html.

  3. Groww, Multibagger stocks Retrieved from https://groww.in/p/multibagger-stocks.

  4. https://top10stockbroker.com/share-market-education/multibagger-stocks/.

  5. https://www.equitymaster.com/timeless-reading/33/pick-the-best-multibagger-stocks-in-2021.

  6. https://www.moneycontrol.com/news/business/markets/identifying-multibaggers-how-to-pick-stocks-that-can-double-your-wealth-3343091.html.

  7. https://www.lehnerinvestments.com/en/multibagger-stocks-appreciate-multiple-times-over-time/.

  8. https://www.researchandranking.com/blog/how-does-fundamental-research-help-to-find-multibagger-stocks (Feb, 2019).

  9. https://economictimes.indiatimes.com/markets/stocks/news/joel-greenblatts-magic-formula-to-spot-multibagger-stocks-for-long-term%20profits/articleshow/77430326.cms?from=mdr.

  10. https://www.samco.in/knowledge-center/articles/best-multibagger-stocks-to-buy-now-in-india/.

  11. https://tavaga.com/blog/multibagger-stocks/ (april, 2021).

  12. https://tavaga.com/blog/multibagger-stocks/ (april, 2021).

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Authors and Affiliations

  1. Universal Business School, Karjat, Mumbai, India

    Ajay Chauhan

  2. Sri Aurobindo College of Commerce and Management, Ludhiana, Panjab University, Chandigarh, Chandigarh, India

    Swati Gupta & Sanjay Gupta

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  1. Ajay Chauhan
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Correspondence to Sanjay Gupta.

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Appendix

Appendix

See Tables 3, 4, 5, 6, 7, 8, 9, 10, 11, 12 and 13.

Table 3 SSIM—structural self-interaction matrix
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Table 4 Initial reachability matrix
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Table 5 Final reachability matrix
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Table 6 First iteration (partition of reachability matrix)
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Table 7 Second iteration (partition of reachability matrix)
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Table 8 Third iteration (partition of reachability matrix)
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Table 9 Fourth iteration (partition of reachability matrix)
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Table 10 Fifth iteration (partition of reachability matrix)
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Table 11 Sixth iteration (partition of reachability matrix)
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Table 12 Seventh iteration (partition of reachability matrix)
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Table 13 Eighth iteration (partition of reachability matrix)
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Chauhan, A., Gupta, S. & Gupta, S. An ISM and MICMAC Approach for Modelling the Contributors of Multibagger Stocks. Asia-Pac Financ Markets 30, 677–699 (2023). https://doi.org/10.1007/s10690-022-09394-4

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