Two factors that could move the Hcl Technologies (NSI:HCLTECH) share price

The Hcl Technologies (NSI:HCLTECH) share price is currently trading at 960.05. But given the uncertain economic outlook, the question now is what the future holds for it...

To try and predict where the Hcl Technologies 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 Hcl Technologies, 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 Hcl Technologies is its 5-year Return on Capital Employed, which is a solid 26.7%. 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 Hcl Technologies, where the share price has seen a 33.7% 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.

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