A recent look at ownership and volatility brings us to a 0.03480 target portfolio weight (as a decimal) for Groupon, Inc. (NasdaqGS:GRPN) Target weight is the volatility adjusted recommended stock position size for a position in your portfolio. The maximum target weight is 7% for any given stock. The indicator is based off of the 100 day volatility reading and calculates a target weight accordingly. If a stock has been more volatile of late, the lower the target weight will be. The 3-month volatility stands at 34.589000 (decimal). This is the normal returns and standard deviation of the stock price over three months annualized.
Investors often struggle with keeping their emotions in check when approaching the stock market. New investors can have a tendency to sell off winners too quick as well as hold onto losers for way too long. Some will argue that it is never a bad thing to take profits when they are on the table, but this can leave the investor with a large amount of regret if the stock continues to surge after selling. On the other end, investors may hold onto losers for way too long hoping for a bounce back. Holding out for better days can lead to even more exaggerated losses that can leave the investor with an even bigger feeling of regret. Battling to keep emotions separated from important investing decisions can be a big plus for investors over the long haul. Of course, this idea is easier to preach and much harder to follow.
50/200 Simple Moving Average Cross
Groupon, Inc. (NasdaqGS:GRPN) has a 1.02787 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:
Groupon, Inc. (NasdaqGS:GRPN) has Return on Invested Capital of 0.254931, with a 5-year average of 0.033979 and an ROIC quality score of 3.819297. 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.
Investors may have a solid plan in place to start trading the equity market. Sometimes, these plans never get to be fully realized because of the lack of discipline in the early stages. When a new investor goes into the red right out the gate, there can be a tendency to take on too much risk trying to get back to even. This may result in the investor abandoning the plan and making too many unreasonable trades with exorbitant expectations. Finding the self control to not get discouraged with early losses may help the investor stick to the plan and eventually start achieving longer-term goals.
Groupon, Inc. (NasdaqGS:GRPN) of the Media sector closed the recent session at 3.560000 with a market value of $2022792.
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In looking at some Debt ratios, Groupon, Inc. (NasdaqGS:GRPN) has a debt to equity ratio of 0.92602 and a Free Cash Flow to Debt ratio of 0.304237. 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 -3.75298. 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. Groupon, Inc.’s ND to MV current stands at -0.163026. 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 0.279667 for Groupon, Inc. (NasdaqGS:GRPN). 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.
At some point in time, traders may have to deal with the overconfidence issue when dealing with the market. Traders may have times when they go on runs where everything works out. This may cause the individual to become overconfident in their ability and possibly lead to uninformed decisions late on. When the good times are rolling, it can be easy to think that the winners are a direct result of skill. This may be true, but if this is incorrect, it can lead to portfolio damage in the future. Having is long string of winning trades is a great thing, but markets can be cruel and have the ability to turn very quickly. Approaching every trade with the same research and examination may help the trader to make better decisions when a string of trades eventually go the wrong way.
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. Groupon, Inc. (NasdaqGS:GRPN)’s Cash Flow to Capex stands at 2.433595.
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 0.10541 for Groupon, Inc. (NasdaqGS:GRPN). The one year Growth EBIT ratio stands at 1.03201 and is a calculation of one year growth in earnings before interest and taxes. The one year EBITDA growth number stands at 0.24141 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 0.08157. The one year growth in Net Profit after Tax is -2.47874 and lastly sales growth was -0.07443.
Investors will be closely tracking the equity market as we charge through the last couple of months of the year. They may be doing a review of the portfolio to see what moves have worked and which ones haven’t. Reviewing specific holdings and past entry and exit points may help the investor develop new ideas to trade on in the future. Staying on top of market happenings and the economic landscape can be a challenge. Investors will be closely following the action over the next quarter to help gauge whether the bulls will stay out front, or if the bears will take the lead.
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