Nortech Systems Return On Equity vs. Current Valuation

NSYS Stock  USD 11.20  0.08  0.71%   
Based on Nortech Systems' profitability indicators, Nortech Systems Incorporated is yielding more profit at this time then in previous quarter. It has a moderate probability of reporting better profitability numbers in January. Profitability indicators assess Nortech Systems' ability to earn profits and add value for shareholders.
 
Return On Equity  
First Reported
2010-12-31
Previous Quarter
0.19448846
Current Value
0.2
Quarterly Volatility
0.12497108
 
Credit Downgrade
 
Yuan Drop
 
Covid
At this time, Nortech Systems' Price To Sales Ratio is comparatively stable compared to the past year. EV To Sales is likely to gain to 0.43 in 2024, whereas Days Sales Outstanding is likely to drop 47.13 in 2024. At this time, Nortech Systems' Operating Income is comparatively stable compared to the past year. Income Before Tax is likely to gain to about 5.7 M in 2024, despite the fact that Total Other Income Expense Net is likely to grow to (462.6 K).
Current ValueLast YearChange From Last Year 10 Year Trend
Gross Profit Margin0.170.1658
Fairly Up
Very volatile
For Nortech Systems profitability analysis, we use financial ratios and fundamental drivers that measure the ability of Nortech Systems to generate income relative to revenue, assets, operating costs, and current equity. These fundamental indicators attest to how well Nortech Systems Incorporated utilizes its assets to generate profit and value for its shareholders. The profitability module also shows relationships between Nortech Systems's most relevant fundamental drivers. It provides multiple suggestions of what could affect the performance of Nortech Systems Incorporated over time as well as its relative position and ranking within its peers.
  
Check out Correlation Analysis.
Is Electronic Equipment, Instruments & Components space expected to grow? Or is there an opportunity to expand the business' product line in the future? Factors like these will boost the valuation of Nortech Systems. If investors know Nortech will grow in the future, the company's valuation will be higher. The financial industry is built on trying to define current growth potential and future valuation accurately. All the valuation information about Nortech Systems listed above have to be considered, but the key to understanding future value is determining which factors weigh more heavily than others.
Quarterly Earnings Growth
(0.77)
Earnings Share
1.57
Revenue Per Share
49.283
Quarterly Revenue Growth
(0.06)
Return On Assets
0.0348
The market value of Nortech Systems is measured differently than its book value, which is the value of Nortech that is recorded on the company's balance sheet. Investors also form their own opinion of Nortech Systems' value that differs from its market value or its book value, called intrinsic value, which is Nortech Systems' true underlying value. Investors use various methods to calculate intrinsic value and buy a stock when its market value falls below its intrinsic value. Because Nortech Systems' market value can be influenced by many factors that don't directly affect Nortech Systems' underlying business (such as a pandemic or basic market pessimism), market value can vary widely from intrinsic value.
Please note, there is a significant difference between Nortech Systems' value and its price as these two are different measures arrived at by different means. Investors typically determine if Nortech Systems is a good investment by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, Nortech Systems' 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.

Nortech Systems Current Valuation vs. Return On Equity Fundamental Analysis

Comparative valuation techniques use various fundamental indicators to help in determining Nortech Systems's current stock value. Our valuation model uses many indicators to compare Nortech Systems value to that of its competitors to determine the firm's financial worth.
Nortech Systems Incorporated is considered to be number one stock in return on equity category among its peers. It also is rated top company in current valuation category among its peers reporting about  358,661,676  of Current Valuation per Return On Equity. At this time, Nortech Systems' Return On Equity is comparatively stable compared to the past year. Comparative valuation analysis is a catch-all technique that is used if you cannot value Nortech Systems by discounting back its dividends or cash flows. It compares the stock's price multiples to nearest competition to determine if the stock is relatively undervalued or overvalued.

Nortech Current Valuation 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.

Nortech Systems

Return On Equity

 = 

Net Income

Total Equity

 = 
0.14
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.
Enterprise Value is a firm valuation proxy that approximates the current market value of a company. It is typically used to determine the takeover or merger price of a firm. Unlike Market Cap, this measure takes into account the entire liquid asset, outstanding debt, and exotic equity instruments that the company has on its balance sheet. When a takeover occurs, the parent company will have to assume the target company's liabilities but will take possession of all cash and cash equivalents.

Nortech Systems

Enterprise Value

 = 

Market Cap + Debt

-

Cash

 = 
48.99 M
Enterprise Value can be a useful tool to compare companies with different capital structures. Long term liability and current cash or cash equivalents can have a huge impact on market valuation of a given company.

Nortech Current Valuation vs Competition

Nortech Systems Incorporated is rated top company in current valuation category among its peers. After adjusting for long-term liabilities, total market size of Information Technology industry is now estimated at about 6.21 Billion. Nortech Systems maintains roughly 48.99 Million in current valuation contributing less than 1% to equities under Information Technology industry.

Nortech Systems Profitability Projections

The most important aspect of a successful company is its ability to generate a profit. For investors in Nortech Systems, profitability is also one of the essential criteria for including it into their portfolios because, without profit, Nortech Systems will eventually generate negative long term returns. The profitability progress is the general direction of Nortech Systems' change in net profit over the period of time. It can combine multiple indicators of Nortech Systems, 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.
Last ReportedProjected for Next Year
Accumulated Other Comprehensive Income-532 K-558.6 K
Operating IncomeM6.3 M
Income Before Tax5.5 M5.7 M
Total Other Income Expense Net-487 K-462.6 K
Net Income6.9 M7.2 M
Income Tax Expense-1.4 M-1.3 M
Net Income Applicable To Common Shares1.8 M1.9 M
Net Income From Continuing Ops2.1 M2.2 M
Non Operating Income Net Other-157.4 K-149.5 K
Interest Income1.2 M757.5 K
Net Interest Income-439 K-460.9 K
Change To Netincome93.6 K98.3 K
Net Income Per Share 2.53  2.65 
Income Quality 0.26  0.24 
Net Income Per E B T 1.26  1.32 

Nortech Profitability Driver Comparison

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

Use Nortech Systems 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 Nortech Systems 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 Nortech Systems will appreciate offsetting losses from the drop in the long position's value.

Nortech Systems Pair Trading

Nortech Systems Incorporated Pair Trading Analysis

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

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Additional Tools for Nortech Stock Analysis

When running Nortech Systems' price analysis, check to measure Nortech Systems' 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 Nortech Systems is operating at the current time. Most of Nortech Systems' value examination focuses on studying past and present price action to predict the probability of Nortech Systems' future price movements. You can analyze the entity against its peers and the financial market as a whole to determine factors that move Nortech Systems' price. Additionally, you may evaluate how the addition of Nortech Systems to your portfolios can decrease your overall portfolio volatility.