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Halma: a high-quality investment?

High-quality companies outperform junk companies in the stock market. From Robert Novy-Marx to Joseph Piotroski, the world’s foremost investment academics have built up a body of work that confirms quality as a stock market factor that outperforms over time.

But what exactly is this quality factor?

Put simply, it represents strong cash-generation, consistent profits, high rates of return on investment, high margins and robust financial health. Quality companies are the kind of thing Warren Buffett might pick up (at the right price, of course).

Stockopedia's Quality Rank attempts to address three key questions concerning a stock:

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  1. Is the company a stable, growing, cashflow generative business with high returns?

  2. In which direction are the company's fundamentals headed

  3. Is there a risk to your capital in investing in this company?

GET MORE DATA-DRIVEN INSIGHTS INTO LON:HLMA »

What Stockopedia’s Quality Rank says about Halma

Stockopedia has built its Quality Rank to quickly show investors how well every stock in the market stacks up according to these criteria. Is Halma (LON:HLMA) a high-quality investment?

Halma has a Quality Rank of 96. This puts it in the top quartile of the stock market in terms of quality characteristics. High quality stocks are desirable investments but they often come at a premium - so checking Halma's Value Rank might be an appropriate next step.

Studies indicate that combining factors such as Value, Quality and Momentum is a more effective way of outperforming the market over longer time frames. That's why we have constructed our StockReports to give an instant impression of how well exposed Halma (LON:HLMA) is to these three factors. We go into greater detail on factor investing in this video.

Stockopedia helps you to identify return-enhancing factors such as Quality, Value and Momentum by analysing thousands of data points every day. To find out more about you find investment opportunities and analyse your portfolios then take one of our two-week free trials and have a look around.