In today’s world, there are more and more investment opportunities opening up to potential investors. As a result, it becomes necessary for potential investors to have knowledge of some of the important traits of a good investment opportunity to help make right investments. Jumia Travel, the leading online travel agency, shares 4 surprising traits of a good investment opportunity.
Company is Buying Back Shares
At first glance, you might think this is a sign of business that is not doing well but businesses that buy back their shares are many times doing so to increase the wealth of their current and longstanding shareholders, which prima facie makes this a more lucrative investment opportunity.
An Easy to Understand Business Model
Many times, the simpler a company’s business model is the easier it is to run, which means the business will more likely be stable and have a good growth curve. This in the end translates into a lucrative investment opportunity because of its propensity for stable and sustainable growth and development.
Viability in the Long-Term
You should try to stay away from investing in companies that don’t seem to have prospects of long term viability, this is because most money made in business investments comes from owning stocks in a company for quite a while, then leaving it alone until the value of your currency rises and reinvesting your dividends. This tends to pay off much better than rapidly buying and selling stocks in a business.
Promising Market Cap
It is a good idea to compare the market cap of the business you are looking to invest in to similarly priced businesses. This will help you determine whether or not the stocks are going to be worth what you are paying for them.