NetEase Operating Margin vs. Profit Margin
Based on the measurements of profitability obtained from NetEase's financial statements, NetEase 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 NetEase's ability to earn profits and add value for shareholders.
Check out Correlation Analysis to better understand how to build diversified portfolios. Also, note that the market value of any company could be closely tied with the direction of predictive economic indicators such as various price indices.
Please note, there is a significant difference between NetEase's value and its price as these two are different measures arrived at by different means. Investors typically determine if NetEase is a good investment by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, NetEase'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.
For NetEase profitability analysis, we use financial ratios and fundamental drivers that measure the ability of NetEase to generate income relative to revenue, assets, operating costs, and current equity. These fundamental indicators attest to how well NetEase utilizes its assets to generate profit and value for its shareholders. The profitability module also shows relationships between NetEase's most relevant fundamental drivers. It provides multiple suggestions of what could affect the performance of NetEase over time as well as its relative position and ranking within its peers.
NetEase |
NetEase Profit Margin vs. Operating Margin Fundamental Analysis
Comparative valuation techniques use various fundamental indicators to help in determining NetEase's current stock value. Our valuation model uses many indicators to compare NetEase value to that of its competitors to determine the firm's financial worth. NetEase is considered to be number one stock in operating margin category among its peers. It also is considered to be number one stock in profit margin category among its peers fabricating about 1.12 of Profit Margin per Operating Margin. Comparative valuation analysis is a catch-all model that can be used if you cannot value NetEase by discounting back its dividends or cash flows. This model doesn't attempt to find an intrinsic value for NetEase's Stock. Still, instead, it compares the stock's price multiples to a benchmark or nearest competition to determine if the stock is relatively undervalued or overvalued.NetEase Profit Margin 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.
NetEase |
| = | 0.21 % |
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.
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.
NetEase |
| = | 0.23 % |
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.
NetEase Profit Margin Comparison
NetEase is currently under evaluation in profit margin category among its peers.
NetEase Profitability Driver Comparison
Profitability drivers are factors that can directly affect your investment outlook on NetEase. 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 NetEase 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 NetEase's important profitability drivers and their relationship over time.
Use NetEase 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 NetEase 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 NetEase will appreciate offsetting losses from the drop in the long position's value.NetEase Pair Trading
NetEase Pair Trading Analysis
The ability to find closely correlated positions to NetEase could be a great tool in your tax-loss harvesting strategies, allowing investors a quick way to find a similar-enough asset to replace NetEase 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 NetEase - 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 NetEase to buy it.
The correlation of NetEase 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 NetEase moves, either up or down, the other security will move in the same direction. Alternatively, perfect negative correlation means that if NetEase 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 NetEase 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 NetEase position
In addition to having NetEase 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 Defense Thematic Idea Now
Defense
Fama and French investing themes focus on testing asset pricing under different economic assumptions. The Defense theme has 15 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 Defense Theme or any other thematic opportunities.
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Check out Correlation Analysis to better understand how to build diversified portfolios. Also, note that the market value of any company could be closely tied with the direction of predictive economic indicators such as various price indices. You can also try the Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
Other Tools for NetEase Stock
When running NetEase's price analysis, check to measure NetEase's market volatility, profitability, liquidity, solvency, efficiency, growth potential, financial leverage, and other vital indicators. We have many different tools that can be utilized to determine how healthy NetEase is operating at the current time. Most of NetEase's value examination focuses on studying past and present price action to predict the probability of NetEase's future price movements. You can analyze the entity against its peers and the financial market as a whole to determine factors that move NetEase's price. Additionally, you may evaluate how the addition of NetEase to your portfolios can decrease your overall portfolio volatility.
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