Avaya Holdings Corp currently holds roughly 217
M in cash with 30
M of positive cash flow from operations. This results in cash-per-share (CPS) ratio of 2.5, which can makes it an attractive takeover target, given it will continue generating positive cash flow.
Investing in Avaya Holdings, 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 Avaya Holdings 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 Avaya Holdings' 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.
Watch out for price decline
Please consider monitoring Avaya Holdings on a daily basis if you are holding a position in it. Avaya Holdings is trading at a penny-stock level, and the possibility of delisting is much higher compared to other delisted stocks. However, just because the stock is trading under one dollar, does not mean it will be marked for deletion.
Most exchanges require public instruments, such as Avaya Holdings stock to be traded above the $1 level to remain listed. If Avaya Holdings stock price falls below $1 for 30 consecutive trading days, the exchange can delist it. Once the company reaches this point, they will be sent an initial price violation notice directly from an exchange.
How important is Avaya Holdings's Liquidity
Avaya Holdings
financial leverage refers to using borrowed capital as a funding source to finance Avaya Holdings Corp ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. Avaya Holdings 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 Avaya Holdings' 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 Avaya Holdings' 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 Avaya Holdings's total debt and its cash.
Avaya Holdings Correlation with Peers
Investors in Avaya can reduce exposure to individual asset risk by holding a diversified portfolio of assets in addition to a long position in Avaya Holdings Corp. Diversification will allow for the same portfolio return with reduced risk. The correlation table of Avaya Holdings and its peers is a two-dimensional matrix that shows the correlation coefficient between pairs of securities Avaya 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 Avaya for more details
Details
Avaya Holdings Corp secures Sharpe Ratio (or Efficiency) of -0.0732, which signifies that the company had -0.0732% of return per unit of standard deviation over the last 3 months. Macroaxis philosophy in foreseeing the risk of any stock is to look at both systematic and unsystematic factors of the business, including all available market data and
technical indicators. Avaya Holdings Corp exposes twenty-one different
technical indicators, which can help you to evaluate volatility that cannot be
diversified away. Please be advised to confirm Avaya Holdings Corp
risk adjusted performance of
(0.05), and Mean Deviation of 10.64 to double-check the risk estimate we provide.
Will Avaya Holdings continue to go out of control?
Current value at risk is at -21.21. Avaya Holdings Corp is displaying above-average volatility over the selected time horizon. Investors should scrutinize Avaya Holdings Corp independently to ensure intended market timing strategies are aligned with expectations about Avaya Holdings volatility. Avaya Holdings Corp is a potential penny stock. Although Avaya Holdings may be in fact a good instrument to invest, many penny stocks are speculative in nature and are subject to artificial price hype. Please make sure you totally understand the upside potential and downside risk of investing in Avaya Holdings Corp. We encourage investors to look for signals such as email spams, message board hypes, claims of breakthroughs, volume upswings, sudden news releases, promotions that are not reported, or demotions released before SEC filings. Please also check biographies and work history of current and past company officers before investing in high volatility instruments, penny stocks, or equities with microcap classification. You can indeed make money on Avaya instrument if you perfectly time your entry and exit. However, remember that penny stocks that have been the subject of artificial hype usually unable to maintain their increased share price for more than just a few days. The price of a promoted high volatility instrument will almost always revert back. The only way to increase shareholder value is through legitimate performance backed up by solid fundamentals.
Whereas some other firms in the software—application industry are either recovering or due for a correction, Avaya Holdings may not be performing as strong as the other in terms of long-term growth potentials. The inconsistency in the assessment between current Avaya valuation and our trade advice on Avaya Holdings is due to the recent market swings and your selection of investing horizon. Please use our equity advice module to run different scenarios to ensure your current risk level and investment horizon are fully reflective of your current investing preferences in regards to Avaya Holdings.
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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 Avaya Holdings Corp. Please refer to our
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