Scottish Mortgage Investment Trust PLC (LON: SMT) share price has risen 3% over the past week amid a broad recovery in the US Nasdaq stock market exchange.
SMT shares are trading back above their 50-day exponential moving average (EMA), having dipped briefly below the critical indicator earlier in the month amid a broad sell-off in US stock indices, especially the tech-heavy NASDAQ index.
The investment trust’s share price closely follows the NASDAQ index’s performance given its heavy bias towards leading US tech stocks such as Tesla, trade on the index.
Given that the US earnings season kicks off in earnest this week, with leading tech companies such as Tesla releasing their earnings report, investors will be watching SMT’s share price closely.
SMT’s share price did not dip as low as the Nasdaq’s did below the 50-day EMA, which investors and analysts use as a crucial indicator of whether a stock is in an uptrend or a downtrend.
The investment trust’s share price bounced back above the 50-EMA and the Nasdaq index but with minor losses compared to the tech-heavy index.
Scottish Mortgage Trust’s fundamentals are pretty solid given that the trust is regarded as a Dividend Hero since it has been raising its annual dividend for the past 39 years, with the minimum requirement to qualify as a Dividend Hero being 20 years.
However, SMT’s annual dividend is less than 1%, which is relatively low compared to other Dividend Heroes that pay a 4% to 5% dividend. Still, its share appreciation in recent years far outpaces its peers in this exclusive club.
SMT also has solid management under the leadership of Tom Slater, the incoming fund manager who has been with the fund for many years as co-manager, and many expect him to continue the fund’s tradition of outsized returns on its investments.
The current rally could keep going if the tech companies held by the fund report positive earnings that beat analysts’ expectations.
*This is not investment advice.
Scottish Mortgage Trust (SMT) share price.
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