(2) Constant Rise In Quarterly Earnings
It is one of the most popular & great signs indicating stock price may skyrocket anytime. Corporate earnings are center of attraction for many investors.
It is mandatory for publicly traded companies to release quarterly earnings report every three months. Several investors or traders prefer to follow them to predict future trends of a stock price.
A constant rise in quarterly earnings alone is not a genuine indicator that the share price will shoot up. But, when this indicator is combined with other factors, it can play a significant role in determining the possibility of price rise.
Several investors prefer to invest in such profitable companies for quick gains. Thus, investor behavior seems to create self-fulfilling prophecies.
(3) Lowering Of Corporate Debt Levels
It is one of the most critical signals indicating stock price about to surge heavily. Corporate debts are often meant to repay or refinance old debts, takeover an existing company, or even to meet the working capital requirements for a new project.
A higher debt can ruin the profitability of a company. It is perhaps due to payment of significant amount of interest along with principal amount.
Investors often prefer to invest in companies with lower debts levels as compared to those with higher debts.
You should always analyze the purpose of raising debts, kind of debt (short term or long term), affordability of company to repay loans, special provisions that may force for immediate pay back, & many more.
If a company is gradually removing its debts then it is likely to perform better in near future. There are very few circumstances where a company lowers its debt & then perform badly within next 6-12 months.
It is possible only when something catastrophic happens in the economy. Thus, you can invest carefully in a company that is lowering debts with time.
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