In the realm of Specialty Industrial Machinery, American Superconductor (AMSC) and Caterpillar (CAT) are two noteworthy contenders. With AMSC's market capitalization at
$297.8M and an industry concentration in Electrical Components & Equipment, the company's
financial health is a topic of interest for many investors. Despite a loss in the EPS estimate for the current year of $0.95 and next year's estimate at $0.37, AMSC has been showing signs of improvement with a quarterly revenue growth of 0.121. However, the company's financial situation is not without its challenges. The Return on Assets stands at -0.11, indicating a loss, and the Profit Margin is at -0.33. The company's EBITDA is also in the red at -$26.5M. This negative trend extends to the Free Cash Flow, which is at -$23.7M, and a decrease in cash of $23.8M. Despite these challenges, the Wall Street target price for AMSC is $9.67, with the highest estimated target price by analysts being $13. The book value per share is $2.769, and the company has $23.4M in cash and short-term investments. The valuation real value stands at $11.71, and the analyst overall consensus for the stock is a 'Strong Buy'. In contrast, Caterpillar (CAT) operates in the same industry but has a different financial profile. To make an informed decision on the optimal exit strategy, it is crucial to consider these factors and more. Stay tuned as we delve deeper into the financials of these two companies, aiming to provide a comprehensive guide to navigate the volatile waters of the stock market. Many prudent traders are currently steering clear of the electrical equipment sector. Therefore, it is worthwhile to delve deeper into American Superconductor and evaluate its position relative to Caterpillar and other comparable firms. We will explore some of the competitive elements of both American Superconductor and Caterpillar.
Out of tens of thousands of stocks, funds, and ETFs that trade on global exchanges each represent an individual company which you can analyze using comparative analysis. To determine which one of the two entities, such as American or Nel is a better fit for your portfolio, analyzing a few basic fundamental indicators is a good first step.
How important is American Superconductor's Liquidity
American Superconductor
financial leverage refers to using borrowed capital as a funding source to finance American Superconductor ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. American Superconductor 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 American Superconductor's 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 American Superconductor's 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 American Superconductor's total debt and its cash.
Correlation Between American and Nel ASA
In general, Stock analysis is a method for investors and traders to make individual buying and selling decisions. Stock correlation analysis is also essential because it can help investors realize that they may not be as diversified as they think. Risk management strategies are usually required to make sure all portfolios are properly aligned against their risk tolerance level. You can consider holding American Superconductor together with similar or unrelated positions with a negative correlation. For example, you can also add Nel ASA to your portfolio. If Nel ASA is not perfectly correlated to American Superconductor it will diversify some of the market risks out of the positively correlated stocks in your portfolio. However, the disadvantage of this sort of hedging is that it can potentially affect your investment returns throughout market cycles. When American Superconductor, for example, performs excellent and delivers stable returns, the negatively correlated position you locked in as a hedge may drag your returns down.
Are you currently holding both American Superconductor and Nel ASA in your portfolio? Please note if you are using this as a pair-trade strategy between American Superconductor and Nel ASA, watch out for correlation discrepancy over time. Relying on the historical price correlations and assuming that it will not change may lead to short-term losses. Please check
pair correlation details between AMSC and NLLSF for more information.
Another Deeper Perspective
Revenue is income that a firm generates from business activities such us rendering services or selling goods to customers. It is a crucial part of a business and an essential item when evaluating a company's financial statements. Revenues from a firm's primary business operations can be reported on the income statement as sales revenue, net sales, or simply sales, depending on the industry in which a given company operates.
Revenue is typically recorded when cash or cash equivalents are exchanged for services or goods and can include product or services discounts, promotions, as well as early payments on invoices or services rendered in advance.
Revenue Breakdown
Now, let's check American Superconductor revenue. Based on the latest financial disclosure, American Superconductor reported 105.98
M of revenue. This is 96.97% lower than that of the Electrical Equipment sector and significantly higher than that of the
Industrials industry. The revenue for all United States stocks is 98.88% higher than that of American Superconductor. As for Caterpillar we see revenue of 59.43
B, which is much higher than that of the Industrials
| AMSC | 105.98 Million | 0.18 |
| Sector | 0.0 | 0.0 |
| CAT | 59.43 Billion | 99.82 |
As a seasoned investor, you might be considering American Superconductor (AMSC), a company in the Specialty Industrial Machinery industry, and Caterpillar (CAT) stocks. AMSC's
financial health is characterized by a Current Ratio of 1.52X and Net Assets of
175.56M. The company's Book Value stands at 2.769, with a Price to Book ratio of 1.10X.
However, AMSC's
financial performance indicators suggest some caution. The company reported Earnings Per Share (EPS) estimate for the current year at a loss of 0.95, and an Operating Margin of -0.3. The number of shares shorted is 567.13K, indicating some market skepticism. In contrast, AMSC's Cash Flow dynamics seem more positive. The company ended the period with a Cash Flow of 25.7M, although it started with a higher figure of 49.5M. This indicates a significant cash burn, which might raise concerns for potential investors. Despite these challenges, Wall Street has set a Target Price for AMSC at 9.67, indicating a potential upside of 14.29. The company's Beta stands at 1.49, suggesting a higher risk compared to the overall market. As an investor, you should weigh these factors against your risk tolerance and investment goals before deciding your optimal exit strategy. Comparatively, Caterpillar (CAT) may present a different risk-reward profile, necessitating a separate analysis. Remember, a well-diversified portfolio is key to managing risk and achieving long-term investment success. .
Volatility analysis of American Superconductor indicates possible reversal in September
The recent analysis of the volatility of American Superconductor Corporation (AMSC) indicates a potential reversal in the stock's performance in September. The company's semi-deviation, a measure of downside risk, has recently risen above 2.92, suggesting a higher probability of extreme negative returns. This increased volatility could be a precursor to a price reversal. Investors should closely monitor the stock in the coming weeks and consider this heightened risk when making investment decisions. As of August 2nd, American Superconductor has a risk-adjusted performance of 0.1842, and a Mean Deviation of 5.36. Technical analysis of American Superconductor provides a methodology to utilize historical prices and volume patterns to determine a pattern that approximates the direction of the company's future prices. In other words, this information can be used to determine if the company will indeed mirror its model of historical prices and volume momentum, or if the prices will eventually revert. We have been able to interpolate and collect nineteen technical drivers for American Superconductor, which can be compared to its
competitors.
Please verify American Superconductor's Jensen Alpha, and the relationship between the coefficient of variation and potential upside to determine if American Superconductor is priced correctly, given that the market reflects its regular price of 11.98 per share. Given that American Superconductor has a Jensen Alpha of 2.22, we recommend that you validate American Superconductor's current market performance to ensure the company can sustain itself in the future. In conclusion, American Superconductor (AMSC) stock presents a compelling investment opportunity. With a
Valuation Market Value of 11.98 and a
Valuation Real Value of 11.71, the stock is reasonably priced. The Analyst Overall Consensus is a 'Strong Buy', backed by 4 analysts who have issued 'Strong Buy' recommendations. The range of estimated target prices, from a low of 7 to a high of 13, suggests potential for significant upside. However, investors should also consider the possible downside price of 6.53. Given these factors, AMSC could be poised for a comeback, offering an attractive entry point for investors. .
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Raphi Shpitalnik is a Junior Member of Macroaxis Editorial Board. Raphael is a young entrepreneur who joined Macroaxis on a part-time basis at the beginning of the pandemic and eventually acquired a real taste for investing and fintech. He likes to analyze different equity instruments across a wide range of industries, focusing primarily on consumer products, sports, fintech, cannabis, and AI.
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 Raphi Shpitalnik do not own shares of American Superconductor. Please refer to our
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