Assessment of the impact of Covid-19 on Techtronic Industries Co stock price

A question on the minds of many investors right now is how the economic uncertainty caused by the Covid pandemic will continue to affect large-cap stocks, such as Techtronic Industries Co (HKG:669).

Shares in Techtronic Industries Co are currently trading at 128.3. But to assess whether the price is likely to fall or recover over the next 12 months, we need a objective way of telling whether it is capable of withstanding economic shocks. To do this, it’s worth looking at the stock’s profile to see where its strengths lie.

Above all, we are interested in finding impartial ways to watch Techtronic Industries Co – something that takes the emotion out of the analysis…

Promisingly, there are indications that it is performing well against some important financial and technical metrics. In particular, he shows signs of being a high quality, strong momentum Stock.

Research shows that high quality Stocks tend to be resilient, cash-generating businesses that can compound investment returns over time. Also, strong momentum prices and earnings can be an indicator of positive trends that are likely to continue.

Here’s why these factors are important:

Why quality can pay off

When it comes to stock analysis, the quality of the company tends to show itself in high profitability and strong leading margins. These types of businesses are stable, growing, and often have accelerating sales and profits. They also have solid and improving financial histories, with no obvious signs of accounting risk or bankruptcy.

One of the quality indicators for Techtronic Industries Co is its return on capital employed over 5 years, which is 16.1%. Double-digit long-term ROCEs can be a hallmark of companies with the power to grow very profitably.

Harness the power of momentum

Positive 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.

There are signs of this at Techtronic Industries Cowhere the share price experienced a 50.1% performance 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, a combination of high quality and momentum can be a clue in finding stocks that can deliver strong investment returns 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 Techtronic Industries Co which you can read about here.