There are a lot of sectors that are undervalued for investing. But I would suggest, avoid looking for specific sectors for multibaggers stocks rather look at specific companies. It would be wise to find and invest in decent compounders with a good balance sheet and growth prospects.
Below are a few points which you can consider for finding good growth stories.
- Low Debt: companies that do not have a high amount of debt.
- Light asset-based model: companies that do not require much of Infrastructure to expand their services, so that they can scale faster compared to high capital intensive companies.
- Low PE: Valuation is in a comfortable range
- Monopoly/Duopoly business
- Less dependence on Imports from China: a business where the supply chain will not be disrupted.
- High growth prospects
I hope it will help you in finding undervalued stocks.