Two factors that could move the Relx (LON:REL) share price

Two factors that could move the Relx (LON:REL) share price

Article image

The Relx (LON:REL) share price is currently trading at 2,393p. But given that there is still a lot of uncertainty about the health of the wider economy, the question now is what the future holds for it...

To try and predict where the Relx price will head next, it's worth knowing its strengths and potential weaknesses. The good news is that it stacks up well against some important financial and technical measures...

Specifically, it's a large-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 Relx, here's a close-up view:

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 stand out quality metrics for Relx is its 5-year Return on Capital Employed, which is a solid 22.0%. Good, double-digit ROCEs are 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 true at Relx, where the share price has seen a 20.7% 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.


Intrigued? 

You should be. The screen that has helped unearth the stock idea detailed in this article is just one of the many tools available at Stockopedia that can help make you a better investor. 

Powered by years of research and huge volumes of data analysis which are normally not available to private investors, we have developed the tools that will give you a better chance of beating the market. 

What are you waiting for. Click here to sign up to your free trial today. 


About us

Stockopedia helps individual investors make confident, profitable choices in the stock market. Our StockRank and factor investing toolbox unlocks institutional-quality insights into thousands of global stocks. Voted “Best Investment Research Tools” and “Best Research Service” at the 2021 UK Investor Magazine awards.

Relx's StockRank™

High FlyerConservative

Relx's StockRank™

With a StockRank of 80, Relx is more attractive than 80% of the 7,654 stocks we cover in Europe, according to our proprietary ranking system.

See the full StockReport

Absolutely Perfect

"Trialed multiple other platforms - this is by far my favourite. Other platforms do not even have half the stuff that you can find on Stockopedia. Love it!"

As per our Terms of Use, Stockopedia is a financial news & data site, discussion forum and content aggregator. Our site should be used for educational & informational purposes only. We do not provide investment advice, recommendations or views as to whether an investment or strategy is suited to the investment needs of a specific individual. You should make your own decisions and seek independent professional advice before doing so. Remember: Shares can go down as well as up. Past performance is not a guide to future performance & investors may not get back the amount invested.