• Investing
  • Stock
Round Table Thoughts
  • Economy
  • Editor’s Pick
Home Investing Is Vodafone Idea stock a good contrarian buy as it sinks?
Investing

Is Vodafone Idea stock a good contrarian buy as it sinks?

by January 12, 2023
by January 12, 2023 0 comment
Share
0
FacebookTwitterPinterestWhatsapp

Vodafone Idea (NSE: IDEA) share price has been in a freefall in the past few months as concerns about the company’s future rose. The stock plunged to a low of ₹7.25, which was about 56% below the highest level in 2021. It is sitting at its lowest point since September 2021. So, is IDEA a good contrarian stock to buy?

Going concern issues continue

Vodafone Idea is a troubled telecommunication company that is mostly owned by UK’s Vodafone Group and Aditya Birla. The company has been under intense pressure in the past few years amid low profitability and high debts. Last year, the company’s management admitted that the stock was heading towards an irretrievable point of collapse.

The company has moved from one crisis into another. For example, the company was entangled in a decade-long confrontation with the Indian government. The government wanted Vodafone Group to pay back taxes following its acquisition in 2007.

Vodafone Idea was then hit with a $7 billion fine because of a license fee by the government. Most importantly, the company is losing market share to Reliance’s Jio and Bharti Airtel. It lost 3.5 million customers in October last year while Jio added 1.4 million in the same period.

The stock continued plunging this year after the company said that it needed an emergency loan worth about ₹70 billion or $849 million.

Analysts believe that banks will be afraid of extending loans to the company. Besides, it is already struggling to pay its debts. The government wants Vodafone Idea’s parent companies to inject more capital to the company. They have both pledged to invest between ₹20 billion and ₹30 billion, which is lower than the ₹400-500 billion that the government wants.

Therefore, there are serious questions about Vodafone Idea’s future as its losses and competition mount and liquidity tightens. 

Vodafone Idea share price forecast

VOD stock chart by TradingView

The daily chart shows that the IDEA stock price has been in a strong bearish trend in the past few weeks. This sell-off intensified when the stock formed a death cross pattern in April 2022. A death cross happens when a company’s 200-day and 50-day moving averages make a crossover. 

The shares then moved below the lower side of the descending triangle pattern. Therefore, I suspect that the stock will continue falling this year as it faces significant headwinds. The next key level to watch will be at ₹5.

The post Is Vodafone Idea stock a good contrarian buy as it sinks? appeared first on Invezz.

You Might Also Like
  • Tesla is now the top luxury car brand in the U.S.: buy Tesla stock?
  • Should you buy or sell the S&P 500 index after failing to hold above 4,000 points?
  • Mike Mayo expects bank stocks to massively outperform this year
  • Here’s what protests at Foxconn plant mean for the Apple stock
Share
0
FacebookTwitterPinterestWhatsapp

previous post
Yes Bank share price is plunging: Is there an end in sight?
next post
Cathie Wood’s ARK buys 74,792 more Coinbase shares

You may also like

Bernstein analyst reacts to TSMC boosting investment in the U.S.

December 6, 2022

Shell warns of a $2.0 billion tax hit in the...

January 6, 2023

Diageo share price forms a wide symmetrical triangle

November 25, 2022

What Is An Implied Volatility Crush

January 16, 2023

Cathie Wood’s ARK buys 74,792 more Coinbase shares

January 12, 2023

Unemployment rate falls to 3-month low in Japan; Monthly retail...

December 27, 2022

As Glazers seek sale, how much is Manchester United worth?

November 28, 2022

S&P 500 will keep within this range in 2023: David...

December 6, 2022

3 global macro themes to watch in 2023

December 26, 2022

Should I buy Verizon Communications shares in January 2023?

December 25, 2022

    Stay updated with the latest news, exclusive offers, and special promotions. Sign up now and be the first to know! As a member, you'll receive curated content, insider tips, and invitations to exclusive events. Don't miss out on being part of something special.


    By opting in you agree to receive emails from us and our affiliates. Your information is secure and your privacy is protected.

    Recent Posts

    • Oil prices rise more than 1% as Israel vows to intensify attacks on Iran

      June 20, 2025
    • RRG Alert Tech Vaults to ‘Leading’—Is XLK Signaling a New Rally?

      June 20, 2025
    • Apple looking to make ‘premium’-priced folding iPhones starting next year, analyst says

      June 20, 2025
    • Nike pushes back Skims launch with Kim Kardashian due to production delays

      June 19, 2025
    • The Fed Is Getting It Wrong AGAIN As They Hold Rates Steady

      June 19, 2025

    Popular Posts

    • 1

      Biden appointee played key role in recruiting Chinese...

      June 25, 2024 3,599 views
    • 2

      Trump-era China sanctions ended by Biden may be...

      June 27, 2024 2,875 views
    • 3

      Walz’s honeymoon with China gets fresh scrutiny as...

      August 9, 2024 2,578 views
    • 4

      Shein’s global ambitions leaves some cybersecurity experts fearful...

      July 10, 2024 2,541 views
    • 5

      Harris VP pick spent years promoting research facility...

      August 29, 2024 2,417 views

    Categories

    • Economy (7,009)
    • Editor's Pick (2,142)
    • Investing (538)
    • Stock (2,621)

    Popular Posts

    • 1

      Biden appointee played key role in recruiting Chinese businesses to Delaware: ‘Longtime friends’

      June 25, 2024
    • 2

      Trump-era China sanctions ended by Biden may be revived under new House GOP bill

      June 27, 2024
    • 3

      Walz’s honeymoon with China gets fresh scrutiny as Harris camp blasts ‘lying’ critics

      August 9, 2024
    • 4

      Shein’s global ambitions leaves some cybersecurity experts fearful of Chinese spy threats

      July 10, 2024
    • 5

      Harris VP pick spent years promoting research facility that collaborated with ‘Chinese military company’

      August 29, 2024

    Latest News

    • Oil prices rise more than 1% as Israel vows to...

      June 20, 2025
    • RRG Alert Tech Vaults to ‘Leading’—Is XLK Signaling a New...

      June 20, 2025
    • Apple looking to make ‘premium’-priced folding iPhones starting next year,...

      June 20, 2025

    Categories

    • Economy (7,009)
    • Editor's Pick (2,142)
    • Investing (538)
    • Stock (2,621)

    Disclaimer: RoundTableThoughts.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

    Copyright © 2024 RoundTableThoughts.com. All Rights Reserved.

    Round Table Thoughts
    • Investing
    • Stock
    Round Table Thoughts
    • Economy
    • Editor’s Pick

    Read alsox

    Gamma Scalping Options Trading Strategy

    September 14, 2023

    Crypto.com teams up with Coca-Cola to...

    December 6, 2022

    Don’t expect a bull market anytime...

    January 3, 2023
    Sign In

    Keep me signed in until I sign out

    Forgot your password?

    Password Recovery

    A new password will be emailed to you.

    Have received a new password? Login here