When stocks are plummeting in price, it’s hard to start buying into all the uncertainty. But a disciplined long term investor knows there’s no better time to buy than right now. And I’m not talking about buying into speculative, high-risk stocks. I’m talking about the well-proven, robust track record Sogou Inc.. Why? Size. Financial health. Proven performance.
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Sogou Inc. provides search and search-related services in the People’s Republic of China. Started in 2005, and led by CEO Xiaochuan Wang, the company now has 2.30k employees and with the company’s market cap sitting at US$2.4b, it falls under the mid-cap group. Typically, large companies are well-established and highly resourced, meaning that stock market volatility may impact some short-term strategic decisions but unlikely to matter in the long run. Therefore, large-cap stocks are a safe bet to buy more of when the general market is selling off.
Having high levels of debt can put pressure on companies during downturns since they have to continuously service their debt payments and interest costs. This means they need to maintain enough cash-on-hand for these expenses as well as maintain a cash cushion for unforeseen circumstances, which can get costly. In Sogou’s case, they have no debt on the books, which eliminates short-term debt pressures highly-levered companies may face. Sogou’s enviable cash position of US$1.1b provides it with more than enough liquidity to meet other near-term liabilities, placing it in a financially robust standpoint in the face of uncertainty.
SOGO’s profit growth over the previous five years has been positive, with an average annual rate of 84%, overtaking the industry growth rate of 34%. This continuous market outperformance demonstrates a strong track record of delivering robust returns over many years, raising my confidence in Sogou as a long-term hold.
Next Steps:Sogou makes for a robust long-term investment based on its scale, financial health and track record. Remember, in bear markets, sell-offs can be unjustified. Ask yourself, has anything really changed with Sogou? If not, then why not scoop it up at a discount? Lining your portfolio with a few well-established companies can reduce your risk and help you scale your wealth in the long run. One thing you should remember though, is to do your homework. Do your own research, come up with your point of view. Below is a list I’ve put together of other things you should consider before you buy:
- Future Outlook: What are well-informed industry analysts predicting for SOGO’s future growth? Take a look at our free research report of analyst consensus for SOGO’s outlook.
- Valuation: What is SOGO worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether SOGO is currently mispriced by the market.
- Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at email@example.com.