Life insurance is potentially the sector which will experience this kind of margin expansion over the coming decade. Most insurance companies presently have wafer thin margins between 2% to 4%.
Even a meagre 4% revenue growth at 6% margin will make their EPS zoom up by 300%.
Presently all Insurance stocks are fully valued (i.e 4% margin priced in but 6% margin not priced in)
Someone who enters now will ride the expansion from 4% margin to 6%. Those who had the foresight to enter at half the rate in 2020 March will get a 6x bagger when EPS goes up 3x
Additionally, Insurance companies reinvest the premium corpus accumulated with them which creates a secondary revenue stream with zero added expansion cost. Very high operating leverage business model and an under-penetrated sector (75% Indians don't have insurance cover).
If the uptrend has sustained for a greater time (12Mo) whereas the correction is relatively quick and deep (3Mo), as though it is in a hurry to complete a pattern, it is usually the accumulation zone for a fresh impulse wave.
Whereas, if the correction is taking its own time & allowing (i.e inviting) people to buy, it is usually a distribution prior to multi-year stagnation
Smart money knows deep, swift corrections scare retail investors into selling, while long consolidation attracts value investors
Moral : Smart money is smart for a reason
They don't do what laymen do i.e consensus buying in 'value stocks'. Possibility of returns is greatest at the point where your brain tells you "it's too risky to buy THIS at THIS PRICE".