Sociedad Quimica y Minera de Chile S.A. (NYSE:SQM) has been recommended as a long term growth pick according to Beta Research. With their stock price currently trading around $44.03, the firm has proven a solid track record of growth over the past few years. Investors might consider the stock as a long term growth candidate as the firm has yielded -8.00% earnings per share growth over the past 5 years and -2.30% revenue growth over that same time frame.
Investors may be searching for various types of stocks to help diversify the portfolio. Growth stocks include shares of companies that may have the possibility of generating higher than average profit growth and revenues. These companies tend to pump earnings back into the business, and they generally expand quicker than the overall economy. Although growth stocks can be a bit riskier, they can also provide a higher level of reward down the line. Cyclical stocks consist of companies that typically will ride the wave of the overall economy. These shares tend to perform well when the economy is doing well and perform poorer when the economy is faltering.
Long-term growth (LTG) is an investing strategy where a stock will (hopefully) grow in value for a relatively long period of time. Long-term growth should be considered to be a relative term, due to different styles and goals of investors, but the endgame is the same.
A “buy-and-hold” investor will consider long-term growth as a longer time period then a day trader will. The buy-and-hold strategy looks ahead farther into the future, giving short-term price swings less consideration as long as the fundamentals stay the same. A trader is looking more closely at a weekly, or shorter, time frame and is more interested in immediate price fluctuations.
Let’s take a look at how the stock has been performing recently. Over the past twelve months, Sociedad Quimica y Minera de Chile S.A. (NYSE:SQM)’s stock was -25.34%. Over the last week of the month, it was -5.76%, -2.46% over the last quarter, and -22.97% for the past six months.
Over the past 50 days, Sociedad Quimica y Minera de Chile S.A.’s stock is -9.77% off of the high and 11.36% removed from the low. Their 52-Week High and Low are as follows: -30.96% (High), 11.36%, (Low).
Despite the past success, investors want to know where the stock is headed from here. Analysts covering the shares have a consensus short-term price target of $55.49 on the equity. Analysts have a consensus recommendation of 2.20 based on a 1 to 5 scale where 1 represents a Strong Buy and 5 a Strong Sell.
Many investors are concerned with the proper portfolio diversification. Stock portfolio diversification entails spreading the investment dollars around to help minimize risk. When investors are creating a portfolio, they may be looking to add a combination of growth, value, income, dividend, and foreign stocks. They may also be spreading out stock picks among various industries. Keeping a mix of stocks that perform differently under certain market conditions can help keep the portfolio afloat when the environment shifts. Holding a few large positions in a small number stocks may lead to trouble if the market turns sour and stock prices decline drastically.