Vodafone shares have fallen by 24% YTD. Should I invest?..

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Vodafone is positioned to weather the COVID-related storms
Total Q1 revenues decreased by only 2.8% year over year, mainly due to the impact of COVID-19
Vodafone is not overvalued, but perhaps now is not the best time to invest in this stock

Vodafone (NASDAQ: VOD) shares have fallen from $20.4 below $12 in less than a few months and the current price is around $13.9. When trading these shares, investors should remember that Vodafone is a stable company with a good position in the market.

Fundamental analysis: Vodafone is positioned to weather the COVID-related storms

Vodafone is a British multinational telecommunications company and one of the most geographically diversified global telecommunications operators. Vodafone announced its first quarter results, total revenues declined only 2.8% year-on-year, mainly due to the impact of COVID-19, and the Adjusted EBITDA outlook for fiscal 2021 remains unchanged.

According to rumors, Vodafone could buy MásMóvil for EUR 6 billion, which would put Vodafone in a leading position in the Spanish telecommunications market. It is also important to mention that Verizon and Amazon could invest more than 4 billion dollars to participate in the Indian Vodafone idea.

The company increased its 2019 revenues to $49.56B from $48.98B in 2018, and the growth projects will ensure that the numbers will continue to grow in the future. Comparing total equity of $69 billion and market capitalization of $38 billion, this stock is not overvalued.

Another useful piece of information for potential investors is that this company has paid more than $1.9 billion in dividends to its shareholders in the last three years, and this number may increase in the future. Vodafone shares are currently attractively valued and analysts say the company is positioned to weather the COVID-related storms.

This share could be a good long-term investment, but perhaps now is not the best time to buy Vodafone shares, as the share price may weaken further in the coming weeks.

Technical analysis: $11 represents a very strong support

Vodafone shares have so far performed significantly worse than the broader market in 2020. When trading Vodafone, you should bear in mind that the price could weaken even further in the coming weeks.

Data source: tradingview.com

On this diagram I have marked important resistance and support levels. The important support levels are $13 and $11, $15 and $17 represent the resistance levels.

If the price jumps above $15 it would be a signal to buy this stock and we have the open path to $16. A rise above $17 supports the continuation of the uptrend and the next price target could be around $19.

On the other hand, if the price falls below $11, this would be a strong “sell” signal and we have the open path to $10.

Summary

I think that this share could be a good long-term investment, but perhaps now is not the best time to invest in Vodafone shares, as the share price could fall even further in the coming weeks. If the price jumps above $15, it would be a signal to buy that stock and we have the open road to $16.

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