Three Factors That Could Influence Kenmare Resources Share Price
In times of economic uncertainty, companies in all sectors can be affected and it can be difficult to predict the direction of the stock markets…
The good news is that there are strategies that can guide you through these uncertain times – and help you take advantage of the opportunities the market has to offer.
One of them is known as “factor investing”. Proven and well-researched drivers of stock market earnings can help steer you towards the types of stocks that, at least statistically, have the potential to outperform. Three influential “factors”, Kenmare Resources (LON: KMR) Might be worth investigating…
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Choose high quality over junk food
Over the years, finance scholars and market professionals have come to a consensus about what really makes some stocks perform well (and others poorly).
Their studies of stock market data revealed that there are three factors that tend to show up over and over again. The first is Quality…
Companies with a track record of profitable growth, high efficiency and strong finances have proven to be better bets on average than low-quality, loss-making companies.
- By our calculations (which use a range of financial quality measures) Kenmare Resources has a quality level of 72 (where zero is poor and 100 is excellent).
Opt for cheap rather than expensive
Another well-documented observation is that attractively valued stocks tend to outperform expensive stocks on average over time. It is therefore important to look Value and whether a company gets a fair price for what it earns, owns and pays.
- By our calculations (which look at multiple valuation metrics) Kenmare Resources has a value rank of 79.
Look for a positive trend
It’s easy to think that Momentum is only a measure for technical traders, but research once again shows that recent price and fundamental trends can be a strong clue for the future. In the market, trends tend to persist, so it makes sense to look for stocks that are on an upward trajectory.
- According to our calculations (which take into account both price and earnings dynamics) Kenmare Resources has a Momentum rank of 86.
Overall, there are signs here that Kenmare Resources has above-average exposure to three important drivers of stock market earnings…
What does this mean for potential investors?
Good quality stocks that are well priced and rising in the market have very broad appeal. But there is no guarantee. It’s hard to find bulletproof shares – and we’ve identified some areas of concern with Kenmare Resources, which you can find here. Knowing the warning signs and being aware of weakness is essential if you want to preserve your wealth.