Cardiovascular Systems currently holds roughly 159.83
M in cash with (24.27
M) of positive cash flow from operations. This results in cash-per-share (CPS) ratio of 3.9. Cardiovascular Systems currently holds 22.15
M in liabilities with Debt to Equity (D/E) ratio of 0.09, which may suggest the firm is not taking enough advantage from borrowing. The entity has a current ratio of 5.93, suggesting that it is liquid enough and is able to pay its financial obligations when due. Debt can assist Cardiovascular Systems until it has trouble settling it off, either with new capital or with free cash flow. So, Cardiovascular Systems' shareholders could walk away with nothing if the company can't fulfill its legal obligations to repay debt. However, a more frequent occurrence is when companies like Cardiovascular Systems sell additional shares at bargain prices, diluting existing shareholders. Debt, in this case, can be an excellent and much better tool for Cardiovascular to invest in growth at high rates of return. When we think about Cardiovascular Systems' use of debt, we should always consider it together with cash and equity.
Investing in Cardiovascular Systems, just like investing in any other equity instrument, is characterized by a strong risk-return correlation. High risks mean high returns and low risk means lower expected returns. Risk management is the act of identifying and assessing the potential risk and developing strategies to minimize these risks and earn maximum possible profits while holding Cardiovascular Systems along with other instruments in the same portfolio. Using conventional
technical analysis and
fundamental analysis to select individual securities into a portfolio complements risk management and adds value to overall investors' investing strategies.
How important is Cardiovascular Systems's Liquidity
Cardiovascular Systems
financial leverage refers to using borrowed capital as a funding source to finance Cardiovascular Systems ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. Cardiovascular Systems financial leverage is typically calculated by taking the company's all interest-bearing debt and dividing it by total capital. So the higher the debt-to-capital ratio (i.e., financial leverage), the riskier the company. Financial leverage can amplify the potential profits to Cardiovascular Systems' owners, but it also increases the potential losses and risk of financial distress, including bankruptcy, if the firm cannot cover its debt costs. The degree of Cardiovascular Systems' financial leverage can be measured in several ways, including by ratios such as the debt-to-equity ratio (total debt / total equity), equity multiplier (total assets / total equity), or the debt ratio (total debt / total assets). Please check the
breakdown between Cardiovascular Systems's total debt and its cash.
Cardiovascular Systems Correlation with Peers
Investors in Cardiovascular can reduce exposure to individual asset risk by holding a diversified portfolio of assets in addition to a long position in Cardiovascular Systems. Diversification will allow for the same portfolio return with reduced risk. The correlation table of Cardiovascular Systems and its peers is a two-dimensional matrix that shows the correlation coefficient between pairs of securities Cardiovascular is related in some way. The cells in the table are color-coded to highlight significantly positive and negative relationships. Each cell shows the correlation between one pair of equities and can be used to run pair trading strategies or create efficient portfolios with
your current brokerage. Please check
volatility of Cardiovascular for more details
Breaking down the case for Cardiovascular Systems
Cardiovascular Systems appears to be somewhat reliable, given 3 months investment horizon.
Cardiovascular Systems secures Sharpe Ratio (or Efficiency) of 0.1, which signifies that the company had 0.1% of return per unit of risk over the last 3 months. Our standpoint towards foreseeing the volatility of a stock is to use all available market data together with stock-specific
technical indicators that cannot be
diversified away. By analyzing
Cardiovascular Systems technical indicators you can presently evaluate if the expected return of 0.68% is justified by implied risk. Please makes use of Cardiovascular Systems' Downside Deviation of 2.72,
risk adjusted performance of 0.1099, and Mean Deviation of 2.56 to double-check if our risk estimates are consistent with your expectations.
Cardiovascular Systems is projected to stay under USD20 in March
Variance is down to 41.53. It may signify a possible volatility plunge. Cardiovascular Systems is displaying above-average volatility over the selected time horizon. Investors should scrutinize Cardiovascular Systems independently to ensure intended market timing strategies are aligned with expectations about Cardiovascular Systems volatility. Understanding different market volatility trends often help investors to time the market. Properly using volatility indicators enable traders to measure Cardiovascular Systems' stock risk against market volatility during both bullish and bearish trends. The higher level of volatility that comes with bear markets can directly impact Cardiovascular Systems' stock price while adding stress to investors as they watch their shares' value plummet. This usually forces investors to rebalance their portfolios by buying different stocks as prices fall.
The Bottom Line
Although other companies in the medical devices industry are either recovering or due for a correction, Cardiovascular may not be as strong as the others in terms of longer-term growth potentials. To conclude, as of the 11th of February 2023, our final 90 days recommendation on the firm is
Strong Hold. We believe Cardiovascular Systems is currently
undervalued with
very small odds of financial turmoil for the next two years.
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Gabriel Shpitalnik is a Member of Macroaxis Editorial Board. Gabriel is a young entrepreneur and writes predominantly on the business, technology, and finance sector. He likes to analyze different equity instruments across a wide range of industries focusing primarily on consumer products and evolving technologies.
View Profile This story should be regarded as informational only and should not be considered a solicitation to sell or buy any financial products. Macroaxis does not express any opinion as to the present or future value of any investments referred to in this post. This post may not be reproduced without the consent of Macroaxis LLC. Macroaxis LLC and Gabriel Shpitalnik do not own shares of Cardiovascular Systems. Please refer to our
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