UK markets closed
  • FTSE 100

    7,500.89
    +34.98 (+0.47%)
     
  • FTSE 250

    20,338.96
    +93.53 (+0.46%)
     
  • AIM

    933.20
    +4.84 (+0.52%)
     
  • GBP/EUR

    1.1820
    +0.0002 (+0.02%)
     
  • GBP/USD

    1.2139
    -0.0064 (-0.52%)
     
  • BTC-GBP

    20,104.36
    +76.20 (+0.38%)
     
  • CMC Crypto 200

    574.64
    +3.36 (+0.59%)
     
  • S&P 500

    4,280.15
    +72.88 (+1.73%)
     
  • DOW

    33,761.05
    +424.38 (+1.27%)
     
  • CRUDE OIL

    91.88
    -2.46 (-2.61%)
     
  • GOLD FUTURES

    1,818.90
    +11.70 (+0.65%)
     
  • NIKKEI 225

    28,546.98
    +727.65 (+2.62%)
     
  • HANG SENG

    20,175.62
    +93.19 (+0.46%)
     
  • DAX

    13,795.85
    +101.34 (+0.74%)
     
  • CAC 40

    6,553.86
    +9.19 (+0.14%)
     

Two reasons to watch the Maruwa Co (TYO:5344) share price

  • Oops!
    Something went wrong.
    Please try again later.
·2-min read
In this article:
  • Oops!
    Something went wrong.
    Please try again later.

The Maruwa Co (TYO:5344) share price is currently trading at ¥15,960. But given the uncertain economic outlook, the question now is what the future holds for it.

To try and predict where the Maruwa Co price will head next, it's worth knowing its strengths and potential weaknesses. The promising news is that it appears to stack up well against some important financial and technical measures...

Specifically, it's a mid-cap share with exposure to two influential drivers of investment returns in the stock market: high quality and strong momentum.

Quality and momentum are highly prized among investors. Good quality stocks are more likely to be resilient, cash-generating businesses that can compound investment returns over time. Strong momentum in price and earnings is a pointer to stocks with positive trends with the potential to continue.

To understand why quality and momentum are so important in a share like Maruwa Co, here's a close-up view:

GET MORE DATA-DRIVEN INSIGHTS INTO TYO:5344 »

Why quality matters...

When it comes to stock analysis, company quality tends to show up in high profitability and strong industry-leading margins. These kinds of firms are stable, growing and often have accelerating sales and earnings. They also have strong and improving financial histories with no signs of accountancy or bankruptcy risk.

One of the quality metrics for Maruwa Co is its 5-year Return on Capital Employed, which is 17.3%. Good, double-digit ROCEs can be a pointer to companies that can grow very profitably.

...and why momentum is so powerful

Positive momentum trends show up in share prices and earnings growth. You can find the clues in stocks that are trading close to their 52 week high prices and outperforming the market. They’ll often be beating broker estimates and getting forecast upgrades and recommendation changes.

This is appears to be the case at Maruwa Co, where the share price has seen a 55.3% return relative to the market over the past 12 months. Market volatility and economic uncertainty can be a major drag on momentum, but previously strong stocks can be quick to recover when confidence returns.

In summary, good quality and momentum are pointers to some of the best stocks on the strongest uptrends. This combination of factors can be a clue to finding shares that can compound investment returns over many years.

In good times, these shares 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 be warned: these factors don't guarantee future returns and we've identified some areas of concern with Maruwa Co that you can find out about here.

Our goal is to create a safe and engaging place for users to connect over interests and passions. In order to improve our community experience, we are temporarily suspending article commenting