20 Microns - potential multibagger

Stock Opportunities Untested - but worth a good look
25

This is common in Microcap stocks and hence diversification is key. The most important aspect is to ensure you don’t lose capital. So, here is my primary checklist:

  1. Check if there is anything fishy with the company or promoters
  2. Check balance sheet and how capital is deployed. For microcaps, balance sheet is many times more important than earnings
  3. Review their clients / consumers and the sector in general
  4. Ensure their business is robust and is able to withstand cyclicality

From my prior analysis, 20 Microns passed all the checklist and they are generating cash (profitable). So, the risk for capital loss is less.

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26

The growth is sales is on the lower side, but there is improvement in the EBIDTA margins. Going forward, need to see how they do on reducing power & fuel cost, also the where the freight charges are going.

Liquidity of the stock one should be wary of, also if company comes with some big CAPEX plan for near future that should also be kept in view.

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