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The next one hundred bagger?


frog03
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Buffett has done a hundred bagger (twice!!!) with BRK.  A good amount of currently very large companies (Can. Natural, Expeditors INTL, Fairfax, Fastenal, Microsoft, Stryker, Walmart, ...) have been 100 + baggers in recent times.

 

Now, of all the informed folks on this board, any idea of what stock (at current prices) has a shot of being of 100 bagger over the next 20-30 years?

 

Thanks

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Buffett has done a hundred bagger (twice!!!) with BRK.  A good amount of currently very large companies (Can. Natural, Expeditors INTL, Fairfax, Fastenal, Microsoft, Stryker, Walmart, ...) have been 100 + baggers in recent times.

 

Now, of all the informed folks on this board, any idea of what stock (at current prices) has a shot of being of 100 bagger over the next 20-30 years?

 

Thanks

 

BAC, C, AIG, AFL, AIA and any other company that will provide superior products and services to the Chinese (1.4 billion people and rising), Indian (1.1 billion people and rising) and African (800 million people and rising FAST) emerging middle-classes.

 

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I have no idea, but there is a book that was recommended by Chuck Akre called "100 to 1 in the stock market" that covers this topic (although the number of used books has dried up recently and driven up the asking price): http://www.amazon.com/100-stock-market-distinguished-opportunities/dp/0070497729/ref=sr_1_1?s=books&ie=UTF8&qid=1323203064&sr=1-1

 

Basically, it covers over 360 stocks that could have been bought from 1932 (obviously plenty to pick from this year in hindsight) through 1967 where they were 100+ baggers if held to 1971, when the book was being written (so the last was a 100 bagger over a 4-year holding period). It is an interesting bit of stock market history and there are a lot of names that are long gone, but also a few more recognizable names (GEICO and Disney as examples from the 50's that were 100+ times higher in 1971). I tend to think there is a lot more unpredictability than the author often lets on, but it is a well-written, interesting book nonetheless and a good reminder that there is always something out there that is likely to be a great investment......the tough part is to find it and avoid being fooled by randomness and your own psychology along the way.

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BAC, C, AIG, AFL, AIA and any other company that will provide superior products and services to the Chinese (1.4 billion people and rising), Indian (1.1 billion people and rising) and African (800 million people and rising FAST) emerging middle-classes.

 

Citigroup, AIG, and Bank of America are going to be a 100 baggers? And I thought they were big already.

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Although in hindsight they are obvious to all, to those in the industry, Microsoft and Intel were obvious 100 baggers.  Dell was not.  Walmart was also obvious for those who knew retail.  I would say that at the time each were obviously dominant in their niches, which were big enough to support huge growth that benefited from enormous tail winds.  To me Costco was not so obvious, nor was Google or Apple. 

 

Remember, a 10 year 10 bagger could turn into a 20 year 100 bagger.

 

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Good luck on this.  Unless you happen to know an under 40 reincarnation of Buffett.  You have to factor in the multiple years of weak market performance and whether you can stomach it.

 

Ffh has been exactly a zero bagger for the last 12 years or so, based on stock price. 

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BAC, C, AIG, AFL, AIA and any other company that will provide superior products and services to the Chinese (1.4 billion people and rising), Indian (1.1 billion people and rising) and African (800 million people and rising FAST) emerging middle-classes.

 

Citigroup, AIG, and Bank of America are going to be a 100 baggers? And I thought they were big already.

 

I think it is certainly possible over the next 30 years.

 

How many Chinese or Indian or African citizens have mortgages, cars, life insurance, car insurance, home insurance and medical insurance in 2011?

 

Now think about how many will have it in 2041.

 

Where was Canada and the U.S. in 1895 vs. 1935?

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That's a very good question to ask. I appreciate your curiosity and willingness.

 

That being said, I unfortunately can't answer it.

 

I can think of 5 to 10 baggers, but I do not wich one could grow that much with a fair level of confidence.

 

Cheers!

 

Well I don't mind hearing about the 5 and 10s personally.

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fcbn

 

What makes you think fcbn could one day have a market cap the size of US Bankcorp?

Anything's possible, but out of all the tiny banks what is special about fcbn?

 

--Eric

 

-Their financials going back to 1992 are available electronically through SEC EDGAR and their website, they speak for themselves.  I've also attached here. 

 

-The company has a 80 year track record of expanding TBV at a steady rate with very conservative underwriting.

 

-Over the last 20 years, ROA has averaged 0.9%, ROE 12.5%, and ROTBV of 15.8%.  This would imply estimated normalized EPS of roughly $90 - $107.

 

-Over the last 20 years, the worst 3-year ROA was 0.8%, ROE 10.9%, and ROTBV of 13.0%.  This would imply downside average EPS over a 3 year period of roughly $78-95.

 

-As a testament to their conservative underwriting, FDIC has literally be giving them failed banks to take over.  [if you look at their loss ratios, make sure to adjust for FDIC loss guarantees]

 

-Company is very conservative.  Same founding/controlling family also founded/controls FCNCA, which is a larger bank in NC.  Throughout the housing boom, they participated minimally in secularization and retained most of their own loans on their books (eating their own cooking).

 

-Current TBV is $617.  Assuming a normalized multiple of 1.25x TBV (conservative), and assuming compounded TBV growth at 15% (lower than historical), FCBN would be a 100-Bagger in 28.5 years

 

You asked for 100 baggers within a 20-30 year period...this (and maybe FFH) are the only 2 stocks I own that I would say legitimately have a chance. 

 

-2 main risks here:

-1st is liquidity...very illiquid.

-2nd is fraud.  I would say the fraud risk is mitigated to a degree by the fact the FDIC has handed them several failed banks to take over; each time it can be viewed as a stamp of approval from the FDIC.  It is also mitigated by the fact the same founding/controlling shareholder family also controls FCNCA, a larger bank with perhaps more scrutiny on it.

2011.10.31_-_First_Citizens_Bancorp_Inc.xls

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Thanks so much for sharing.  I've just added fcbn to my list of companies I need to do further research on.

Unfortunately that list is getting a little long.  In the last month, I've changed jobs and moved to another state (and bought a 244 year old house that needs a bit of work).  I've been too busy to focus much on this stuff.  Small banks have intrigued me for a while, I can usually separate the good from the bad, but separating the good from the exceptional is a challenge.  Thus far I've gotten frustrated and haven't invested in any.

 

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Thanks so much for sharing.  I've just added fcbn to my list of companies I need to do further research on.

Unfortunately that list is getting a little long.  In the last month, I've changed jobs and moved to another state (and bought a 244 year old house that needs a bit of work).  I've been too busy to focus much on this stuff.  Small banks have intrigued me for a while, I can usually separate the good from the bad, but separating the good from the exceptional is a challenge.  Thus far I've gotten frustrated and haven't invested in any.

 

Bank of the Ozarks is another I would consider exceptional.  However, it is priced much more richly.  I own a few shares of it just to keep it on my watch list. 

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Here is my prediction on the next 100 bagger. It will be on the the new low list at the end of the year it will have a mkt cap well under 1 billion. It will have so much hair on it no one here will want to buy it and if any of us do we will sell it long before it reaches multi bagger status. I have owned a few 100 baggers in my career never went along for the the complete ride a prettier girl allways comes along and yo do not make till death do us part pledges to investment s unless you are WB or its your company.

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