Shares of Infosys Ltd (INFY) are moving on volatility today -0.45% or -0.07 from the open. The NYSE listed company saw a recent bid of 15.49 and 882917 shares have traded hands in the session.
Some investors will scour the markets looking for cheap, quality stocks. These stocks can be attractive for investors looking to find a bargain that could turn into a big winner. Investors may be cautious when searching for these types of stocks. Often times, a stock will see a huge jump and then everyone will hop on the bandwagon to buy without checking into the fundamentals. Sometimes this strategy may work out, but in many cases, the stock has already made the run and become too expensive to add to the portfolio. Conducting diligent research and constantly adding to the individual’s overall market education level may help the investor sift through the sea of stocks and find those names that are really worth getting into.
Turning to Return on Assets or ROA, Infosys Ltd (INFY) has a current ROA of 16.76. This is a profitability ratio that measures net income generated from total company assets during a given period. This ratio reveals how quick a company can turn it’s assets into profits. In other words, the ratio provides insight into the profitability of a firm’s assets. The ratio is calculated by dividing total net income by the average total assets.
A higher ROA compared to peers in the same industry, would suggest that company management is able to effectively generate profits from their assets. Similar to the other ratios, a lower number might raise red flags about management’s ability when compared to other companies in a similar sector.
Now let’s take a look at how the fundamentals are stacking up for Infosys Ltd (INFY). Fundamental analysis takes into consideration market, industry and stock conditions to help determine if the shares are correctly valued. Infosys Ltd currently has a yearly EPS of 0.94. This number is derived from the total net income divided by shares outstanding. In other words, EPS reveals how profitable a company is on a share owner basis.
Another key indicator that can help investors determine if a stock might be a quality investment is the Return on Equity or ROE. Infosys Ltd (INFY) currently has Return on Equity of 20.53. ROE is a ratio that measures profits generated from the investments received from shareholders.
In other words, the ratio reveals how effective the firm is at turning shareholder investment into company profits. A company with high ROE typically reflects well on management and how well a company is run at a high level. A firm with a lower ROE might encourage potential investors to dig further to see why profits aren’t being generated from shareholder money.
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