Home Depot Price To Book vs. Profit Margin
| 0R1G Stock | USD 178.57 216.43 54.79% |
For Home Depot profitability analysis, we use financial ratios and fundamental drivers that measure the ability of Home Depot to generate income relative to revenue, assets, operating costs, and current equity. These fundamental indicators attest to how well Home Depot utilizes its assets to generate profit and value for its shareholders. The profitability module also shows relationships between Home Depot's most relevant fundamental drivers. It provides multiple suggestions of what could affect the performance of Home Depot over time as well as its relative position and ranking within its peers.
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Home Depot Profit Margin vs. Price To Book Fundamental Analysis
Comparative valuation techniques use various fundamental indicators to help in determining Home Depot's current stock value. Our valuation model uses many indicators to compare Home Depot value to that of its competitors to determine the firm's financial worth. Home Depot is number one stock in price to book category among its peers. It also is number one stock in profit margin category among its peers . The ratio of Price To Book to Profit Margin for Home Depot is about 928.36 . The reason why the comparable model can be used in almost all circumstances is due to the vast number of multiples that can be utilized, such as the price-to-earnings (P/E), price-to-book (P/B), price-to-sales (P/S), price-to-cash flow (P/CF), and many others. The P/E ratio is the most commonly used of these ratios because it focuses on the Home Depot's earnings, one of the primary drivers of an investment's value.Home Profit Margin vs. Price To Book
Price to Book (P/B) ratio is used to relate a company book value to its current market price. A high P/B ratio indicates that investors expect executives to generate more returns on their investments from a given set of assets. Book value is the accounting value of assets minus liabilities.
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Price to Book ratio is mostly used in financial services industries where assets and liabilities are typically represented by dollars. Although low Price to Book ratio generally implies that the firm is undervalued, it is often a good indicator that the company may be in financial or managerial distress and should be investigated more carefully.
Profit Margin measures overall efficiency of a company and shows its ability to withstand competition as well as defend against adverse conditions such as rising costs, falling prices, decline in sales or management distress. Profit margin tells investors how well the company executes on its overall pricing strategies as well as how effective the company in controlling its costs.
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In a nutshell, Profit Margin indicator shows the amount of money the company makes from total sales or revenue. It can provide a good insight into companies in the same sector, as well as help to identify trends of a company from year to year.
Home Profit Margin Comparison
Home Depot is currently under evaluation in profit margin category among its peers.
Home Profitability Driver Comparison
Profitability drivers are factors that can directly affect your investment outlook on Home Depot. Investors often realize that things won't turn out the way they predict. There are maybe way too many unforeseen events and contingencies during the holding period of Home Depot position where the market behavior may be hard to predict, tax policy changes, gold or oil price hikes, calamities change, and many others. The question is, are you prepared for these unexpected events? Although some of these situations are obviously beyond your control, you can still follow the important profit indicators to know where you should focus on when things like this occur. Below are some of the Home Depot's important profitability drivers and their relationship over time.
Use Home Depot in pair-trading
One of the main advantages of trading using pair correlations is that every trade hedges away some risk. Because there are two separate transactions required, even if Home Depot position performs unexpectedly, the other equity can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Home Depot will appreciate offsetting losses from the drop in the long position's value.Home Depot Pair Trading
Home Depot Pair Trading Analysis
The ability to find closely correlated positions to Home Depot could be a great tool in your tax-loss harvesting strategies, allowing investors a quick way to find a similar-enough asset to replace Home Depot when you sell it. If you don't do this, your portfolio allocation will be skewed against your target asset allocation. So, investors can't just sell and buy back Home Depot - that would be a violation of the tax code under the "wash sale" rule, and this is why you need to find a similar enough asset and use the proceeds from selling Home Depot to buy it.
The correlation of Home Depot is a statistical measure of how it moves in relation to other instruments. This measure is expressed in what is known as the correlation coefficient, which ranges between -1 and +1. A perfect positive correlation (i.e., a correlation coefficient of +1) implies that as Home Depot moves, either up or down, the other security will move in the same direction. Alternatively, perfect negative correlation means that if Home Depot moves in either direction, the perfectly negatively correlated security will move in the opposite direction. If the correlation is 0, the equities are not correlated; they are entirely random. A correlation greater than 0.8 is generally described as strong, whereas a correlation less than 0.5 is generally considered weak.
Correlation analysis and pair trading evaluation for Home Depot can also be used as hedging techniques within a particular sector or industry or even over random equities to generate a better risk-adjusted return on your portfolios.Use Investing Themes to Complement your Home Depot position
In addition to having Home Depot in your portfolios, you can quickly add positions using our predefined set of ideas and optimize them against your very unique investing style. A single investing idea is a collection of funds, stocks, ETFs, or cryptocurrencies that are programmatically selected from a pull of investment themes. After you determine your investment opportunity, you can then find an optimal portfolio that will maximize potential returns on the chosen idea or minimize its exposure to market volatility.Did You Try This Idea?
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Companies that are related to providing gambling services across multiple geographical areas by investing, exploring, or producing software, hardware, and related infrastructure for running gambling operations or trading speculative assets. The Gambling theme has 38 constituents at this time.
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To fully project Home Depot's future profitability, investors should examine all historical financial statements. These statements provide investors with a comprehensive snapshot of the financial position of Home Depot at a specified time, usually calculated after every quarter, six months, or one year. Three primary documents fall into the category of financial statements. These documents include Home Depot's income statement, its balance sheet, and the statement of cash flows.