Company Valuation: Innovation
Innovation is also an important factor for company valuation.
Depending on your trading strategy, market leaders can be an extremely lucrative group of companies to invest in. These companies are the innovators of their product markets and bring new ideas and new products into consumer markets. When such companies introduce new product ideas they can experience huge stock gains because investors become excited about the company’s future.
Apple ($AAPL), for instance, is a great example of an innovative market leader. Apple introducing new products often has great effects on technology markets and the company’s stock price.