PostHeaderIcon Signs OF A Sliding Stock

Stock trading and investing can be a complicated matter with many indicators and factors to consider all the time. Slight differences in varying degrees from these indicators may or may not affect a certain stock. But what most traders and investors should look for are the many characteristics that may lead to a stock slide.

Although there are many common telltale signs that a certain stock may be heading for a slide, there are others that may not be so obvious at times. Poor earnings, weak cash flows and a doubtful balance sheet shown by a company are some of the more obvious signs that its stock may already be sliding. Here are some other characteristics to look for:

Insider Selling

While it may be normal and common for insiders in a company to unload their own shares for legitimate reasons, it may also be a possible sign that the stock might be sliding. Groups of executives selling a considerable percentage of their shares especially with the stock price at near lows may raise a few eyebrows.

Cuts In Dividend Payments

Many investors look for stocks that pay handsome dividends. It may show how financially stable a company is. A sudden suspension in dividend payments may be a signal that a company might be facing financial problems. It may either be a temporary and easily solvable problem or it may not. But in any case, it is better to take caution since the stock of the company may likely slide in the process.

Complacency And Lack Of Development

A company that does not show its innovative side will usually be left out to wither and die. Successful companies tend to continue innovating and looking for newer and better products and services to offer to customers. Some companies also try to diversify and look for other opportunities to earn profits, not relying solely on the success of a current product line. Complacency, lack of innovation and diversification can easily leave a certain company at the mercy of competitors who are more active and motivated.


Comments are closed.