| 2021 | 2022 | 2023 | 2024 (projected) | Dividend Yield | 0.0263 | 0.0348 | 0.0266 | 0.0253 | Price To Sales Ratio | 0.4 | 0.32 | 0.46 | 0.44 |
Is Steel Connect (USA Stocks:STCN) volatility declining?
 | By Raphi Shpitalnik | Macroaxis Story |
Steel Connect has liabilities totaling $33.96 million and a Debt to Equity (D/E) ratio of 1.25, which is fairly typical for its industry peers. The company's current ratio stands at 1.23, indicating potential challenges in meeting its short-term financial obligations. It's important to evaluate Steel Connect's debt in conjunction with its cash reserves and equity to get a complete picture of its financial health.
Main Ideas
Steel Connect's stock, with a standard deviation of 3.61, suggests that its price movements can be quite erratic, potentially offering both risks and rewards for investors who can handle the ride. The high coefficient of variation at 2K further underscores the stock's volatility, indicating that while there might be opportunities for gains, investors should be prepared for significant price fluctuations.Macroaxis uses a strict editorial review process to publish stories and blog posts. Our publishers support our company and may receive a small commission when the partner links or references are utilized. Commissions do not affect the opinions or evaluations of our editorial team. The information our editors and media partners deliver is confidential and licensed for your sole use as a Macroaxis user. We reserve all rights to the content of this article, and therefore copying or distributing this story in whole or in part is strictly prohibited.
Reviewed by Gabriel Shpitalnik
Volatility is the spice of the stock market, and Steel Connect (NASDAQ: STCN) certainly brings its own unique flavor. With a valuation market value of $12.19 and an analyst overall consensus of strong sell, potential investors might find themselves on a rollercoaster ride. The company's recent financial performance, including a reported loss of $3.5 million, adds another layer of complexity to its investment profile. Understanding these dynamics is crucial for those considering whether Steel Connect could be a strategic addition to their portfolio. Steel Connect is currently offering an expected daily return of 0.1581%, with a risk level, or volatility, of 3.6916% over the next 60 days. While the professional services sector is attracting adventurous investors, some remain cautious about Steel Connect's volatility. Our main concern is whether these anticipated returns adequately compensate for the associated risk.Volatility is a rate at which the price of Steel Connect or any other equity instrument increases or decreases for a given set of returns. It is measured by calculating the standard deviation of the annualized returns over a given period of time and shows the range to which the price of Steel Connect may increase or decrease. In other words, similar to Steel's beta indicator, it measures the risk of Steel Connect and helps estimate the fluctuations that may happen in a short period of time. So if prices of Steel Connect fluctuate rapidly in a short time span, it is termed to have high volatility, and if it swings slowly in a more extended period, it is understood to have low volatility. Please read more on our technical analysis page.
How important is Steel Connect's Liquidity
Steel Connect financial leverage refers to using borrowed capital as a funding source to finance Steel Connect ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. Steel Connect 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 Steel Connect's 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 Steel Connect's 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 Steel Connect's total debt and its cash.
Steel Connect Gross Profit
Steel Connect Gross Profit growth is one of the most critical measures in evaluating the company. The Gross Profit growth rate is calculated simply by comparing Steel Connect previous period's values with its current period's values. Each time period you're measuring should be of equal lengths the increase or decrease, in a company's Gross Profit between two periods. Here we show Steel Connect Gross Profit growth over the last 10 years. Please check Steel Connect's gross profit and other fundamental indicators for more details.
Steel Connect Volatility Drivers
Steel Connect unsystematic risk is unique to Steel Connect and usually not directly affected by the market or economic environment. An example of unsystematic risk is the possibility of poor earnings or a layoff due to coronavirus. One may mitigate nonsystematic risk by buying different securities in the same industry or by buying in different sectors. For example, if you have a position in Steel Connect you can also buy Moxian Inc. You can also mitigate this risk by investing in the industrials sector as well as in companies having nothing to do with it. This type of risk is also called diversifiable risk and can be understood from analyzing Steel Connect important indicators over time. Here we run a correlation analysis between relevant fundamental ratios over at least ten year period to find a relationship in the way they react to changes in Steel Connect income statement and balance sheet. Here are more details about Steel volatility.Click cells to compare fundamentals
Is Steel Connect valued appropriately by the market?
The entity reported the previous year's revenue of 174.11 M. Net Income was 87.98 M with profit before overhead, payroll, taxes, and interest of 42.74 M.
"Volatility is the price you pay for performance," and Steel Connect (NASDAQ: STCN) exemplifies this adage with its intriguing risk-reward profile.With a beta of 0.2, the stock exhibits lower volatility compared to the broader market, suggesting a potentially stable addition to a diversified portfolio. However, the company's probability of bankruptcy stands at a concerning 55.60%, which could deter risk-averse investors. Despite these risks, Steel Connect's price-to-earnings ratio of 3.87X and a significant institutional ownership of 68.70% might appeal to those seeking undervalued opportunities in the Industrials sector. As always, potential investors should weigh these factors carefully against their own risk tolerance and investment goals..
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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 Raphi Shpitalnik do not own shares of Steel Connect. Please refer to our Terms of Use for any information regarding our disclosure principles.