Everyone longs to live the life of a “billionaire” (assets over 100 million yen). It is a daunting prospect if it takes decades to achieve it with savings alone.
On the other hand, many people who have achieved 100 million yen in assets in no time have something in common. They have hit the “ten-bagger stocks” in their stock investments.
Ten-bagger” is a word coined by combining “ten” (the number 10) and “bagger” (slang for “base hit” in baseball), which translates directly to “ten base hits. Investors refer to “stocks whose share price is likely to increase tenfold” as ten-bagger stocks.
In recent years, the term has been used to refer to Toei Animation, an animation production company, and “Ikinari! Pepper Food Service, which operates a chain of restaurants such as “Ikinari! Market advisor Hideo Amano explains how stock prices soar.
One condition is that the stock must have only been IPOed for a short period of time and have a small market capitalization. Institutional investors and foreign funds invest large sums of money in the stock, causing the price to rise quickly, and individual investors follow suit and buy the stock, increasing its value five or ten times in a short period of time.
Which “10X stock” candidates fit these conditions and are the best ones right now? Financial trader Wolf Murata says.
SmartDrive, which went public in December 2010, could be great. It is an automobile driving data analysis service company, and the ban on fully automated driving (Level 4) on public roads will be lifted in April of this year. The company’s system, which can visualize data such as driving distances, will play an important role in an automated driving society.’ The company is forecasting a loss for the fiscal year ending March 2011, but a return to profitability is in sight.”
The two areas where stock prices are suddenly changing dramatically are the biotech (drug discovery) field and game development. Kyoko Amamiya, an economics journalist and president of Amamiya Research Institute, says: “There are many companies in the biotech (drug discovery) and game development sectors.
In the biotech sector, which develops new drugs for intractable diseases and diseases with a large number of patients, the share price rises dramatically as soon as the drugs are put to practical use. For example, Medicinova is developing a drug to treat alcohol and methamphetamine addiction. The company is also developing a drug to treat the aftereffects of the new coronavirus, and this one is being funded by the Canadian government. The market for both of these products is large, and if even one of them is put to practical use, it will affect the share price and may become a ten-bagger stock.”
In the case of game development, when one game title hits the market, the name of the company becomes known at once and attracts a large amount of investment money. An example from last year is the smartphone game maker Bank of Innovation. When “Memento Mori” became a hit, the company’s stock price increased fivefold from 3,000 yen to 15,000 yen in just half a month. Economic journalist Hideki Wajima cites the following stocks: “I would recommend the game company Eidia.
I would recommend the game company EIDIA. The “Sukigaoka Girls High School Tezukuri Idol Office,” which the company plans to develop through a business alliance with an NFT manufacturer, is likely to be a mix of state-of-the-art technology and content.
There are many uncertainties about whether ten-bagger stocks will be successful or not. If you are looking for a company that is both “stability oriented” and has a large share of the market, you should aim for a company that already has a large share of the market. Fairtrade’s Takeshi Nishimura points to the following two stocks: “Ippudo, a ramen chain, has a large market share.
I have high expectations for Chikara no Gen Holdings, which operates the Ippudo ramen chain. The key is overseas expansion, which is expected to exceed domestic sales in the near future. There are few ramen chains that have expanded overseas, where the price per customer is high, and there is still room for growth. The possibility of a 10-fold increase in market capitalization is quite possible. Another stock is Kosaido Holdings Co. Originally a printing company, the group’s “Tokyo Hakusen” is the top earner. The company owns six large-scale funeral halls in Tokyo, including the Kirigaya funeral hall in Shinagawa Ward, and has a firm grip on the market. It is difficult for new entrants to enter the market, so it is likely to grow even more.
Companies that either have not yet attracted attention or are poised to dominate the market next. The stocks that will achieve ten-bagger status are either one or the other.
From the March 24, 2023 issue of FRIDAY
PHOTO： The Asahi Shimbun, Afro, Jiji Press, Sankei Shimbun