Is TV Today Network well positioned to withstand volatility?
An important question for small cap investors right now is whether the current uncertainty caused by Covid-19 will affect the stock prices of companies like Today Television Network.
The stock is currently trading at ₹397.2, but to predict where the price will go over the next 12 months, one should assess its ability to withstand economic shocks and ride out market volatility.
No one has a crystal ball, but research shows that actions that are good quality and to have strong momentum are often better able to meet these kinds of challenges. This is because good quality stocks tend to be resilient, cash-generating businesses that can compound investment returns over time. And those with strong price and earnings momentum are used to beating expectations.
The promising news is that Today Television Network performs well against some important financial and technical metrics, and has at least some exposure to both high quality and strong momentum…
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Why Quality Stocks Pay
When it comes to inventory analysis, the quality of the business tends to translate into high profitability and some of the best margins in the industry. These types of businesses are stable, growing, and often have accelerating sales and profits. They also have solid and improving financial histories, with no signs of bookkeeping or bankruptcy risk.
One of TV Today Network’s quality indicators is its 5-year return on capital employed, which is 20.6%. Good double-digit ROCEs can be an indicator of companies that can grow very profitably.
Harness the power of momentum
Positive dynamic trends are evident in stock prices and earnings growth. You can find the clues in stocks that are trading near their 52-week highs and outperforming the market. They will often exceed broker estimates and get forecast updates and recommendation changes.
Tv Today Network is proof of this, where the stock price has returned 33.1% relative to the market over the past 12 months. Market volatility and economic uncertainty can significantly dampen momentum, but previously strong stocks can quickly rally when confidence returns.
In summary, good quality and momentum indicate some of the best stocks on the strongest uptrends. This combination of factors can be a clue to finding stocks that can generate solid investment profits over many years.
In good times, these stocks can become expensive to buy. But in volatile markets, there may be chances to buy them at cheaper prices.
What does this mean for potential investors?
Finding good quality stocks with strong momentum behind them is a strategy used by some of the world’s most successful investors. But beware: these factors do not guarantee future returns and we have identified some areas of concern with Tv Today Network which you can read about here.