Photronics currently holds roughly 380.83
M in cash with 275.19
M of positive cash flow from operations. This results in cash-per-share (CPS) ratio of 6.17. The company currently holds 32.31
M in liabilities with Debt to Equity (D/E) ratio of 0.06, which may suggest Photronics is not taking enough advantage from borrowing. Photronics has a current ratio of 3.37, suggesting that it is liquid enough and is able to pay its financial obligations when due. Debt can assist Photronics until it has trouble settling it off, either with new capital or with free cash flow. So, Photronics' shareholders could walk away with nothing if the company can't fulfill its legal obligations to repay debt. However, a more frequent occurrence is when companies like Photronics sell additional shares at bargain prices, diluting existing shareholders. Debt, in this case, can be an excellent and much better tool for Photronics to invest in growth at high rates of return. When we think about Photronics' use of debt, we should always consider it together with cash and equity.
Investing in Photronics, just like investing in any other equity instrument, is characterized by a strong risk-return correlation. High risks mean high returns and low risk means lower expected returns. Risk management is the act of identifying and assessing the potential risk and developing strategies to minimize these risks and earn maximum possible profits while holding Photronics along with other instruments in the same portfolio. Using conventional
technical analysis and
fundamental analysis to select individual securities into a portfolio complements risk management and adds value to overall investors' investing strategies.
Sophisticated investors, who have witnessed
many market ups and downs, anticipate that the market will even out over time. This tendency of Photronics' price to converge to an average value over time is called mean reversion. However, historically, high market prices usually discourage investors that believe in mean reversion to invest, while low prices are viewed as an opportunity to buy.
Please note, it is not enough to conduct a financial or market analysis of a single entity such as Photronics. Your research has to be compared to or analyzed against Photronics' peers to derive any actionable benefits. When done correctly, Photronics' competitive analysis will give you plenty of quantitative and qualitative data to validate your investment decisions or develop an entirely new strategy toward taking a position in Photronics.
How important is Photronics's Liquidity
Photronics
financial leverage refers to using borrowed capital as a funding source to finance Photronics ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. Photronics financial leverage is typically calculated by taking the company's all interest-bearing debt and dividing it by total capital. So the higher the debt-to-capital ratio (i.e., financial leverage), the riskier the company. Financial leverage can amplify the potential profits to Photronics' owners, but it also increases the potential losses and risk of financial distress, including bankruptcy, if the firm cannot cover its debt costs. The degree of Photronics' financial leverage can be measured in several ways, including by ratios such as the debt-to-equity ratio (total debt / total equity), equity multiplier (total assets / total equity), or the debt ratio (total debt / total assets). Please check the
breakdown between Photronics's total debt and its cash.
Photronics Gross Profit
Photronics Gross Profit growth is one of the most critical measures in evaluating the company. The Gross Profit growth rate is calculated simply by comparing Photronics previous period's values with its current period's values. Each time period you're measuring should be of equal lengths the increase or decrease, in a company's Gross Profit between two periods. Here we show Photronics Gross Profit growth over the last 10 years. Please check Photronics'
gross profit and other
fundamental indicators for more details.
Photronics Correlation with Peers
Investors in Photronics can reduce exposure to individual asset risk by holding a diversified portfolio of assets in addition to a long position in Photronics. Diversification will allow for the same portfolio return with reduced risk. The correlation table of Photronics and its peers is a two-dimensional matrix that shows the correlation coefficient between pairs of securities Photronics is related in some way. The cells in the table are color-coded to highlight significantly positive and negative relationships. Each cell shows the correlation between one pair of equities and can be used to run pair trading strategies or create efficient portfolios with
your current brokerage. Please check
volatility of Photronics for more details
Breaking down Photronics Indicators
We consider Photronics very steady.
Photronics maintains Sharpe Ratio (i.e., Efficiency) of 0.0591, which implies the firm had 0.0591% of return per unit of risk over the last 3 months. Our standpoint towards forecasting the volatility of a stock is to use all available market data together with stock-specific
technical indicators that cannot be
diversified away. We have found twenty-eight
technical indicators for Photronics, which you can use to evaluate the future volatility of the company. Please check Photronics
risk adjusted performance of
(0.008059), and Coefficient Of Variation of
(5,762) to confirm if the risk estimate we provide is consistent with the expected return of 0.15%.
Can Photronics build up on the current rise?
The coefficient of variation is down to -5762.39 as of today.
Photronics exhibits very low volatility with skewness of -0.21 and kurtosis of 2.98. However, we advise investors to further study Photronics technical indicators to ensure that all market info is available and is reliable. Understanding different
market volatility trends often help investors to time the market. Properly using volatility indicators enable traders to measure Photronics' stock risk against market volatility during both bullish and bearish trends. The higher level of volatility that comes with bear markets can directly impact
Photronics' stock price while adding stress to investors as they watch their shares' value plummet. This usually forces investors to rebalance their portfolios by buying different stocks as prices fall.
Our Conclusion on Photronics
Whereas some companies within the semiconductor equipment & materials industry are still a little expensive, even after the recent corrections, Photronics may offer a potential longer-term growth to investors. While some short-term oriented investors may not share our view, we believe it may be a good time to buy new shares of Photronics.
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Gabriel Shpitalnik is a Member of Macroaxis Editorial Board. Gabriel is a young entrepreneur and writes predominantly on the business, technology, and finance sector. He likes to analyze different equity instruments across a wide range of industries focusing primarily on consumer products and evolving technologies.
View Profile This story should be regarded as informational only and should not be considered a solicitation to sell or buy any financial products. Macroaxis does not express any opinion as to the present or future value of any investments referred to in this post. This post may not be reproduced without the consent of Macroaxis LLC. Macroaxis LLC and Gabriel Shpitalnik do not own shares of Photronics. Please refer to our
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