BASF SE Return On Equity vs. Profit Margin
| BASA Stock | EUR 10.20 0.20 1.92% |
For BASF SE profitability analysis, we use financial ratios and fundamental drivers that measure the ability of BASF SE to generate income relative to revenue, assets, operating costs, and current equity. These fundamental indicators attest to how well BASF SE utilizes its assets to generate profit and value for its shareholders. The profitability module also shows relationships between BASF SE's most relevant fundamental drivers. It provides multiple suggestions of what could affect the performance of BASF SE over time as well as its relative position and ranking within its peers.
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BASF SE Profit Margin vs. Return On Equity Fundamental Analysis
Comparative valuation techniques use various fundamental indicators to help in determining BASF SE's current stock value. Our valuation model uses many indicators to compare BASF SE value to that of its competitors to determine the firm's financial worth. BASF SE is number one stock in return on equity category among its peers. It also is number one stock in profit margin category among its peers . 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 BASF SE's earnings, one of the primary drivers of an investment's value.BASF Profit Margin vs. Return On Equity
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.
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| = | -0.0094 |
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.
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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| = | (0.01) % |
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.
BASF Profit Margin Comparison
BASF SE is currently under evaluation in profit margin category among its peers.
BASF SE Profitability Projections
The most important aspect of a successful company is its ability to generate a profit. For investors in BASF SE, profitability is also one of the essential criteria for including it into their portfolios because, without profit, BASF SE will eventually generate negative long term returns. The profitability progress is the general direction of BASF SE's change in net profit over the period of time. It can combine multiple indicators of BASF 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 six segments Chemicals, Materials, Industrial Solutions, Surface Technologies, Nutrition Care, and Agricultural Solutions. BASF SE was founded in 1865 and is headquartered in Ludwigshafen am Rhein, Germany. BASF SPONS is traded on Frankfurt Stock Exchange in Germany.
BASF Profitability Driver Comparison
Profitability drivers are factors that can directly affect your investment outlook on BASF 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 BASF 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 BASF SE's important profitability drivers and their relationship over time.
Use BASF 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 BASF 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 BASF SE will appreciate offsetting losses from the drop in the long position's value.BASF SE Pair Trading
BASF SE Pair Trading Analysis
The ability to find closely correlated positions to BASF 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 BASF 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 BASF 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 BASF SE to buy it.
The correlation of BASF 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 BASF SE moves, either up or down, the other security will move in the same direction. Alternatively, perfect negative correlation means that if BASF 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 BASF 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.Use Investing Themes to Complement your BASF SE position
In addition to having BASF 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 Long Short Funds Thematic Idea Now
Long Short Funds
Funds or Etfs that are designed to hedge away market risk by investing in combination of bonds, stocks, derivative instruments as well as short positions to maximize returns irrespective of market conditions. The Long Short Funds theme has 46 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 Long Short Funds Theme or any other thematic opportunities.
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Other Information on Investing in BASF Stock
To fully project BASF SE's future profitability, investors should examine all historical financial statements. These statements provide investors with a comprehensive snapshot of the financial position of BASF 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 BASF SE's income statement, its balance sheet, and the statement of cash flows.