Thomson Reuters Corp (TSX:TRI)(NYSE:TRI) has been on a tear since June of last year, rising around 40% during that time. However, with the stock at its 52-week high, it might be a good time for investors to consider selling. In addition, with a Relative Strength Index (RSI) of 82, the stock has also gone into overbought territory. Once the RSI has gone above 70, that means that there has been a high degree of buying and that the stock might be due for a correction.
A big reason the stock is up is thanks to a strong Q4 that saw per-share earnings rise significantly from the prior year despite sales showing modest sales growth of 7%. However, operating profits were down 25%, suggesting the quarter was not as strong as it initially looked.
Overall, there’s not a lot of reason for investors to expect a lot of growth from the stock and although it had good quarter, I wouldn’t expect for the share price to continue to rise.
With many people being more self-sufficient in collecting information these days, the need for Thomson Reuters’ services will only decline as evidenced by its lacklustre sales growth. Ultimately, there’s little room for the stock to rise and so unless you’re looking to collect its dividend of 2.5%, there are going to be better options out there to invest in. And even for dividend investors, that’s not a very exciting yield.
Thomson Reuters is a good, safe investment, but you shouldn’t expect anything more than a modest return as its best days are likely behind it.
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