This report is not a personal recommendation and does not take into account your personal circumstances or appetite for risk.
Momentum Investing – P3 – Diageo
To understand practical aspects of momentum investing better, let us examine a few select companies in detail to determine which stocks can potentially present momentum investment opportunities and identify periods of positive or negative momentum from charts.
Diageo
Alcoholic beverages producer Diageo is a traditional defensive UK Index stock, a type of company that provides stable earnings when markets are turbulent and other shares become riskier investments.
Diageo shares have risen 15% since April and maintain a strong uptrend, with multiple examples of individual positive momentum identifiable on the chart below using the momentum indicator.
Broker consensus is Bullish, with 45% of analysts recommending “buy” and only 3.2% advocating “sell”. (Source: Bloomberg, Date: 31.05.2018)
Brokers’ average 12-month target price is 2697p. The latest recommendation from Credit Suisse is suggesting the stock will “Outperform” the market, with a target price of 2950p. (Source: Bloomberg, Date: 31.05.2018)
Source: CMC Markets, Date: 31.05.2018
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Prepared by Michael van Dulken, Head of Research
