Our projection for Smart Global (USA Stocks:SGH) in August
By Rifka Kats | Macroaxis Story |
Every cloud has a silver lining, and the recent dip in Smart Global Holdings' stock price may just be the investment opportunity savvy traders have been waiting for. This NASDAQ-listed company, a key player in the Semiconductors industry, has seen its stock price fluctuate between a 52-week low of $12.66 and a high of $27.88.
Despite the recent downturn, the company's fundamentals remain strong. The EPS estimate for the current year stands at $1.2, with a promising increase to $2.03 projected for the next year. This, coupled with a low PEG ratio of 0.09, suggests that the stock is undervalued and could offer significant upside potential.
Moreover, the company's real value is estimated at $23.97, higher than its current market value of $23.22, indicating that the stock is trading at a discount. The analyst target price estimated value stands at $26.17, suggesting a potential upside price of $26.62.
However, investors should also consider the risks. The company has a relatively high beta of 1.685, indicating a higher level of volatility compared to the overall market. Additionally, Smart Global Holdings reported a significant loss from discontinued operations, amounting to $195.4M.
In conclusion, while the recent dip in Smart Global Holdings' stock price may raise eyebrows, the underlying fundamentals suggest that this could be an untapped investment opportunity. As always, potential investors should conduct thorough research and consider their risk tolerance before making a decision. Currently, Smart Global Holdings is experiencing an increase in Free Cash Flow compared to previous years. The company's Begin Period Cash Flow is projected to rise to approximately $438.4 million, while the Sale Purchase Of Stock is expected to increase to -$21.1 million. This report aims to analyze our current position on Smart Global for traders contemplating shorting the stock. We will focus on why traders might still consider investing in the company.
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Reviewed by Raphi Shpitalnik
The recent dip in Smart Global Holdings' stock price could be an untapped investment opportunity for those with an eye for potential growth. Despite a substantial maximum drawdown of 25.09%, the company's EPS estimate for next year stands at a robust $2.03. With a low PEG ratio of 0.09, this suggests that the stock may be undervalued relative to its earnings growth. However, investors should be mindful of the company's negative Jensen Alpha of -0.11, indicating underperformance relative to the market.
Please note, it is not enough to conduct a financial or market analysis of a single entity such as Smart Global. Your research has to be compared to or analyzed against Smart Global's peers to derive any actionable benefits. When done correctly, Smart Global's 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 Smart Global Holdings.
Main Points
Smart Global Holdings has a beta of 1.6216, indicating it's likely to outperform the market during positive returns but underperform during downturns. The beta value helps investors gauge if Smart Global's movements align with the broader market and its relative volatility. Essentially, if Smart Global's deviation from the market is minimal, it adds little risk to the portfolio but also doesn't significantly boost expected returns.There are currently many different techniques concerning forecasting the market as a whole as well as predicting future values of individual securities such as Smart Global Holdings. Regardless of method or technology, to accurately forecast the stock market is more a matter of luck rather than a particular technique. Nevertheless, trying to predict the stock market accurately is still an essential part of the overall investment decision process. Using different forecasting techniques and comparing the results might improve your chances of accuracy even though unexpected events may often change the market sentiment and impact your forecasting results.
Predictive Modules for Smart Global
How important is Smart Global's Liquidity
Smart Global financial leverage refers to using borrowed capital as a funding source to finance Smart Global Holdings ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. Smart Global 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 Smart Global'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 Smart Global'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 Smart Global's total debt and its cash.
What is driving Smart Global Investor Appetite?
Smart Global Holdings exhibits very low volatility with skewness of -4.22 and kurtosis of 26.51. Understanding different market volatility trends often help investors to time the market. Properly using volatility indicators enable traders to measure Smart Global's stock risk against market volatility during both bullish and bearish trends. The higher level of volatility that comes with bear markets can directly impact Smart Global's 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 financial instruments as prices fall.
As Warren Buffet once said, "Be fearful when others are greedy and greedy when others are fearful." This wisdom may apply to the recent dip in Smart Global Holdings' stock price. Despite the current price of $23.34, Wall Street has a target price of $28.38 for the stock, indicating a potential upside. The company's strong fundamentals, including a current ratio of 2.23X and a healthy EBITDA of $116.63M, suggest that it is in a solid financial position. With a PEG ratio of just 0.09, the stock appears undervalued, making this dip a potentially untapped investment opportunity..
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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 Rifka Kats do not own shares of Smart Global Holdings. Please refer to our Terms of Use for any information regarding our disclosure principles.