(10) Strong Or Improving Opinions Of Credit Rating Agencies
It is one of the most powerful signals indicating stock price about to surge heavily. Credit rating agencies are reputed agencies that determine the creditworthiness of bond or debt issuers.
Some of the biggest credit rating agencies controlling 95% of rating business include Moody’s Investors Service, Standard & Poor’s (S&P), and Fitch Ratings.
Their primary role is to rate the risk of defaulting on debt & other credit-related securities. A company’s bond rating is usually based on its ability to repay bonds.
A poor or deteriorating bond rating is often an indication of struggling business scenario of a company. A company with bad or worse bond rating is likely to default on bond repayment in near term.
On the other hand, a company with strong or improving bond ratings is likely to repay its bond holders on maturity.
Thus, investors should invest in stocks of such companies for rapid price appreciation.
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