When investors are recalibrating their portfolios they should take a look at current volatility levels and the target weight calculation of a given stock. Orica Limited (ASX:ORI) has a current target weight (% as a decimal) of 0.03790. This means that any balanced portfolio should not be holding more than this percentage of stock within their holdings group. This number is based on recent stock volatility for the past 100 days.
Investors may be trying to find stocks that are building momentum. Finding these stocks may help bolster the portfolio going into the second half of the year. Investors often look to pounce on any opportunity in the stock market. Without properly being prepared, these opportunities may disappear quickly. Staying on top of fundamentals, technicals, and earnings, may help investors stay prepared.
50/200 Simple Moving Average Cross
Orica Limited (ASX:ORI) has a 0.97474 50/200 day moving average cross value. Cross SMA 50/200 (SMA = Simple Moving Average) and is calculated as follows:
Cross SMA 50/200 = 50 day moving average / 200day moving average. If the Cross SMA 50/200 value is greater than 1, it tell us that the 50 day moving average is above the 200 day moving average (golden cross), indicating an upward moving share price.
On the other hand if the Cross SMA 50/200 value is less than 1, this shows that the 50 day moving average is below the 200 day moving average (a death cross), and tells us that share prices has fallen recently and may continue to do so.
Returns and Margins
Taking look at some key returns and margins data we can note the following:
Orica Limited (ASX:ORI) has Return on Invested Capital of 0.115042, with a 5-year average of 0.169330 and an ROIC quality score of 8.813375. Why is ROIC important? It’s one of the most fundamental metrics in determining the value of a given stock. It helps potential investors determine if the firm is using it’s invested capital to return profits.
Many investors may strive to be in the stock market when the bulls are running and out of the market when the bears are in charge. Investors often use multiple strategies when setting up their portfolios. Some may rely solely on fundamental analysis, technical analysis, or a combination of both. Investing can be an extremely tough process. Individual investors often strive to gather and analyze vast amounts of information in order to make educated decisions. Often times, investors may have initial success in the stock market, and then things may turn sour. Confidence may be necessary to make the tougher decisions, but overconfidence may lead to an underperforming portfolio. Overconfidence may cause the investor to make poor decisions because they are relying too heavily on personal interpretations.
Orica Limited (ASX:ORI) of the Chemicals sector closed the recent session at 17.300000 with a market value of $4733203.
In looking at some Debt ratios, Orica Limited (ASX:ORI) has a debt to equity ratio of 0.74501 and a Free Cash Flow to Debt ratio of 0.196727. This ratio provides insight as to how high the firm’s total debt is compared to its free cash flow generated. In terms of Net Debt to EBIT, that ratio stands at 3.71657. This ratio reveals how easily a company is able to pay interest and capital on its net outstanding debt. The lower the ratio the better as that indicates that the company is able to meet its interest and capital payments. Lastly we’ll take note of the Net Debt to Market Value ratio. Orica Limited’s ND to MV current stands at 0.250769. This ratio is calculated as follows: Net debt (Total debt minus Cash ) / Market value of the company.
Drilling down into some additional key near-term indicators we note that the Capex to PPE ratio stands at 0.066011 for Orica Limited (ASX:ORI). The Capex to PPE ratio shows you how capital intensive a company is. Stocks with an increasing (year over year) ratio may be moving to be more capital intensive and often underperform the market. Higher Capex also often means lower Free Cash Flow (Operating cash flow – Capex) generation and lower dividends as companies don’t have the cash to pay dividends if they are investing more in the business.
When dealing with the stock market, investors may seek to make trades that will limit regret and create a sense of pride. Often times, investors may be challenged with trying to figure out the proper time to sell winners or let go of losers. Of course, nobody wants to sell a winner if it looks like there may be more profits to be had. On the other hand, nobody wants to hold on to a loser for so long that severe losses pile up. Investors often need to assess their own appetite for risk. Some may be able to stomach large swings on a daily basis. Others may not be able to take the volatility when dealing with riskier investments. Risk decisions may be made on past outcomes, and investors who have experienced previous profits and gains may be more likely to take a bigger risk in the future. Those who have only seen substantial losses may be more risk adverse in the future.
In addition to Capex to PPE we can look at Cash Flow to Capex. This ration compares a stock’s operating cash flow to its capital expenditure and can identify if a firm can generate enough cash to meet investment needs. Investors are looking for a ratio greater than one, which indicates that the firm can meet that need. Comparing to other firms in the same industry is relevant for this ratio. Orica Limited (ASX:ORI)’s Cash Flow to Capex stands at 3.248943.
Near-Term Growth Drilldown
Now we’ll take a look at some key growth data as decimals. One year cash flow growth ratio is calculated on a trailing 12 months basis and is a one year percentage growth of a firm’s cash flow from operations. This number stands at 0.31797 for Orica Limited (ASX:ORI). The one year Growth EBIT ratio stands at -0.25910 and is a calculation of one year growth in earnings before interest and taxes. The one year EBITDA growth number stands at which is calculated similarly to EBIT Growth with just the addition of amortization.
Taking even a further look we note that the 1 year Free Cash Flow (FCF) Growth is at 0.12528. The one year growth in Net Profit after Tax is -1.12455 and lastly sales growth was 0.06291.
As we move into the second half of the year, investors may be focused on portfolio performance over the first part of the year. They may be trying to put all the pieces together in order to create a solid plan that will provide sustained profits, even if market conditions deteriorate. This may involve introducing more diversity into the portfolio. One investor may evaluate a stock completely different than another. It may be important to do the necessary research on the overall industry when searching for the next big winner. As the next round of earnings reporting gets underway, investors will be watching to see which companies are positioned for growth over the foreseeable future. Investors will optimally have all their requisite boxes checked when scouting out the next portfolio moves.
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