Nuzee Inc volatility maybe declining already
 | By Vlad Skutelnik | Macroaxis Story |
Volatility is a friend to the wise and a foe to the fool. Nuzee Inc, a NASDAQ-listed company in the Consumer Defensive sector, specifically Packaged Foods, is showing signs of a potential downtrend in volatility. This could be an opportune moment for investors to consider this stock. The company's daily balance of power stands at 0.43, indicating a slight bullish trend. The valuation hype value is at 2.25, while the real value is estimated at $7.74, significantly higher than the current market value of $2.35. This discrepancy suggests a potential upside. The analyst consensus is a strong buy, with a possible upside price of $10.6, and a target price estimated value of $24. This is backed by an accumulation distribution of 1.2K and a positive price action indicator of 0.05. Despite the fiscal year ending in September with a loss, the naive expected forecast value is $2.54, further indicating potential for growth. As the saying goes, when the seas are calm, every ship has a good captain. But it's the wise investor who knows how to navigate the choppy waters of volatility. Nuzee Inc. currently does not generate positive expected returns and assumes an 8.0604% risk (volatility on return distribution) over a 90-day horizon. As many investors are showing interest in the food products sector, it's worth taking a closer look at Nuzee Inc. We will assess whether the recent price volatility of Nuzee suggests a potential rebound in January. The latest risk factors associated with Nuzee may impact the stock's value, as we currently estimate Nuzee to be undervalued. The real value is nearing $7.74 per share.
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Reviewed by Raphi Shpitalnik
Nuzee Inc currently holds $722.94K in liabilities with a Debt to Equity (D/E) ratio of 0.08. This may suggest that Nuzee is not leveraging borrowing to its full potential. The company has a current ratio of 6.38, indicating that it is sufficiently liquid and capable of meeting its financial obligations when they are due.
While debt can be beneficial for Nuzee until it encounters difficulties in repayment, either through new capital or free cash flow, there is a risk. If the company fails to meet its legal obligations to repay debt, Nuzee's shareholders could potentially lose everything. However, a more common scenario is when companies like Nuzee Inc sell additional shares at discounted prices, diluting the value for existing shareholders. In this context, debt can be an excellent tool for Nuzee to invest in growth at high rates of return. When considering Nuzee's use of debt, it should always be evaluated in conjunction with cash and equity.
The company has a Beta (Market Risk) of 2.1622, indicating a somewhat significant risk relative to the market. If the market rises, the company is expected to outperform it. However, if the market returns are negative, Nuzee is likely to underperform.
Nuzee provides data on twenty-one different technical indicators, which can assist in evaluating its performance. Nuzee Inc has an expected return of -1.41%. It is important to verify Nuzee Inc's information ratio, as well as the relationship between the skewness and day median price to determine if Nuzee Inc's past performance will be replicated at some point in the near future.
Main Points
Nuzee Inc's recent volatility metrics indicate a potential downtrend in risk, making it an attractive investment opportunity. The company's Mean Deviation of 4.56 and Standard Deviation of 7.92 suggest a decrease in price fluctuations, which could provide a more stable environment for investors. However, investors should also consider the company's negative Jensen Alpha of -1.89 and Total Risk Alpha of -2.98, which indicate underperformance when adjusting for risk. Volatility is a rate at which the price of Nuzee or any other equity instrument increases or decreases for a given set of returns. It is measured by calculating the standard deviation of the annualized returns over a given period of time and shows the range to which the price of Nuzee may increase or decrease. In other words, similar to Nuzee's beta indicator, it measures the risk of Nuzee and helps estimate the fluctuations that may happen in a short period of time. So if prices of Nuzee fluctuate rapidly in a short time span, it is termed to have high volatility, and if it swings slowly in a more extended period, it is understood to have low volatility. Please read more on our technical analysis page.
Watch out for price decline
Please consider monitoring Nuzee on a daily basis if you are holding a position in it. Nuzee 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 Nuzee stock to be traded above the $1 level to remain listed. If Nuzee 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 Nuzee's Liquidity
Nuzee financial leverage refers to using borrowed capital as a funding source to finance Nuzee Inc ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. Nuzee 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 Nuzee'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 Nuzee'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 Nuzee's total debt and its cash.
Breaking down Nuzee Indicators
The firm reported the previous year's revenue of 3.11 M. Net Loss for the year was (11.8 M) with loss before overhead, payroll, taxes, and interest of (110.41 K). Every cloud has a silver lining, and the potential downtrend in volatility for Nuzee Inc. may just be that silver lining for savvy investors. Despite a high probability of bankruptcy at 95.29%, the company's market risk adjusted performance of -0.75 and a risk adjusted performance of -0.13, the current scenario presents an opportune moment to invest. The company's current ratio stands at a healthy 6.51X, indicating a strong ability to cover short-term liabilities. Moreover, Nuzee Inc. has a working capital of $8.56M and cash and equivalents of $7.52M, providing a solid financial base. The company's shares are currently undervalued with a price to book ratio of 0.67X, suggesting a potential upside. However, investors should be aware of the company's high beta of 1.71, indicating a higher level of volatility compared to the market. Despite the risks, the potential downtrend in volatility could be a golden opportunity for those willing to take the plunge.
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