Traton SE Operating Margin vs. Return On Equity

8TRA Stock  EUR 27.05  1.05  3.74%   
Based on the measurements of profitability obtained from Traton SE's financial statements, Traton SE may not be well positioned to generate adequate gross income at the moment. It has a very high risk of underperforming in January. Profitability indicators assess Traton SE's ability to earn profits and add value for shareholders.
For Traton SE profitability analysis, we use financial ratios and fundamental drivers that measure the ability of Traton SE to generate income relative to revenue, assets, operating costs, and current equity. These fundamental indicators attest to how well Traton SE utilizes its assets to generate profit and value for its shareholders. The profitability module also shows relationships between Traton SE's most relevant fundamental drivers. It provides multiple suggestions of what could affect the performance of Traton SE over time as well as its relative position and ranking within its peers.
  
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Please note, there is a significant difference between Traton SE's value and its price as these two are different measures arrived at by different means. Investors typically determine if Traton SE is a good investment by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, Traton SE's price is the amount at which it trades on the open market and represents the number that a seller and buyer find agreeable to each party.

Traton SE Return On Equity vs. Operating Margin Fundamental Analysis

Comparative valuation techniques use various fundamental indicators to help in determining Traton SE's current stock value. Our valuation model uses many indicators to compare Traton SE value to that of its competitors to determine the firm's financial worth.
Traton SE is rated below average in operating margin category among its peers. It is rated below average in return on equity category among its peers reporting about  0.89  of Return On Equity per Operating Margin. The ratio of Operating Margin to Return On Equity for Traton SE is roughly  1.12 . 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 Traton SE's earnings, one of the primary drivers of an investment's value.

Traton Return On Equity vs. Operating Margin

Operating Margin shows how much operating income a company makes on each dollar of sales. It is one of the profitability indicators which helps analysts to understand whether the firm is successful or not making money from everyday operations.

Traton SE

Operating Margin

 = 

Operating Income

Revenue

X

100

 = 
0.04 %
A good Operating Margin is required for a company to be able to pay for its fixed costs or payout its debt, which implies that the higher the margin, the better. This ratio is most effective in evaluating the earning potential of a company over time when comparing it against a firm's competitors.
Return on Equity or ROE tells company stockholders how effectually their money is being utilized or reinvested. It is a useful ratio when analyzing company profitability or the management effectiveness given the capital invested by the shareholders. ROE shows how efficiently a company utilizes investments to generate income.

Traton SE

Return On Equity

 = 

Net Income

Total Equity

 = 
0.0319
For most industries, Return on Equity between 10% and 30% are considered desirable to provide dividends to owners and have funds for the future growth of the company. Investors should be very careful using ROE as the only efficiency indicator because ROE can be high if a company is heavily leveraged.

Traton Return On Equity Comparison

Traton SE is rated below average in return on equity category among its peers.

Traton SE Profitability Projections

The most important aspect of a successful company is its ability to generate a profit. For investors in Traton SE, profitability is also one of the essential criteria for including it into their portfolios because, without profit, Traton SE will eventually generate negative long term returns. The profitability progress is the general direction of Traton SE's change in net profit over the period of time. It can combine multiple indicators of Traton SE, where stable trends show no significant progress. An accelerating trend is seen as positive, while a decreasing one is unfavorable. A rising trend means that profits are rising, and operational efficiency may be rising as well. A decreasing trend is a sign of poor performance and may indicate upcoming losses.
It operates through Industrial Business and Financial Services segments. Traton SE operates as a subsidiary of Volkswagen Finance Luxemburg S.A. TRATON SE is traded on Frankfurt Stock Exchange in Germany.

Traton Profitability Driver Comparison

Profitability drivers are factors that can directly affect your investment outlook on Traton SE. 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 Traton SE 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 Traton SE's important profitability drivers and their relationship over time.

Use Traton SE 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 Traton SE 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 Traton SE will appreciate offsetting losses from the drop in the long position's value.

Traton SE Pair Trading

Traton SE Pair Trading Analysis

The ability to find closely correlated positions to Traton SE could be a great tool in your tax-loss harvesting strategies, allowing investors a quick way to find a similar-enough asset to replace Traton SE 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 Traton SE - 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 Traton SE to buy it.
The correlation of Traton SE 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 Traton SE moves, either up or down, the other security will move in the same direction. Alternatively, perfect negative correlation means that if Traton SE 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 Traton SE 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.
Pair CorrelationCorrelation Matching

Use Investing Themes to Complement your Traton SE position

In addition to having Traton SE 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?

Run Large Growth Funds Thematic Idea Now

Large Growth Funds
Large Growth Funds Theme
Funds or Etfs that invest in stocks of large-sized companies with above-average risk and growth rate. The Large Growth Funds theme has 39 constituents at this time.
You can either use a buy-and-hold strategy to lock in the entire theme or actively trade it to take advantage of the short-term price volatility of individual constituents. Macroaxis can help you discover thousands of investment opportunities in different asset classes. In addition, you can partner with us for reliable portfolio optimization as you plan to utilize Large Growth Funds Theme or any other thematic opportunities.
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Other Information on Investing in Traton Stock

To fully project Traton SE's future profitability, investors should examine all historical financial statements. These statements provide investors with a comprehensive snapshot of the financial position of Traton SE 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 Traton SE's income statement, its balance sheet, and the statement of cash flows.
Potential Traton SE investors and stakeholders can use historical trends found within financial statements to determine how well the company is positioned for the future. Although Traton SE investors may work on each financial statement separately, they are all related. The changes in Traton SE's assets and liabilities, for example, are also reflected in the revenues and expenses that we see on Traton SE's income statement, which results in the company's gains or losses. Cash flows can provide more information regarding cash listed on a balance sheet but not equivalent to net income shown on the income statement. Please read more on our technical analysis and fundamental analysis pages.