What is a 10 Bagger?
A 10 bagger is a stock that increases in value by at least 10 times its purchase price, or by at least 900%.
The term 10 bagger was coined by legendary fund manager Peter Lynch in his best-selling book, “One Up on Wall Street”.
Any stock that appreciates ten-fold from the date an investor initially purchased it can be referred to as a 10 bagger. Although such investments are a rarity on Wall Street, investors often seek out companies with tremendous growth potential in the hopes of finding the next 10 bagger for their individual portfolios.
How Does a Stock Become a 10 Bagger
If a company's stock is priced at $20 per share and it increases in value to $200, then it is a 10 bagger.
Similarly, if an investor purchases a stock for $5 per share and it increases in value to $50, then it is also a 10 bagger.