Should I trade my Alpha holdings?
 | By Ellen Johnson | Macroaxis Story |
The entity current daily volatility is 6.37 percent, with a beta of 0.03 and an alpha of 1.49 over DOW. Alpha Lithium barely shadows the market. Alpha Lithium Corp shows a prevailing Real Value of $0.46 per share. The current price of the firm is $0.68. Alpha Lithium is overvalued. Our model approximates the value of Alpha Lithium Corp from analyzing the firm fundamentals such as return on equity of (89.75) %, current valuation of 18.03 M, and current ratio of 0.47 X as well as examining its technical indicators and Probability Of Bankruptcy. In general, we favor purchasing undervalued instruments and exiting overvalued instruments since, at some point, asset prices and their ongoing real values will blend.
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Reviewed by Raphi Shpitalnik
The firm has a current ratio of 0.46, indicating that it has a negative working capital and may not be able to pay financial obligations in time and when they become due. Alpha Lithium Corp shows a negative utilization of assets of -48.36 percent, losing $0.4836 for each dollar of assets held by the firm. Inadequate asset utilization signifies that the company is being less effective with each dollar of assets it shows. Put another way asset utilization of Alpha Lithium Corp shows how discouraging it operates for each dollar spent on its assets. Alpha Lithium financial leverage ratio helps determine the effect of debt on the overall profitability of the company. It measures the total debt position of Alpha Lithium, including all of Alpha Lithium's outstanding debt obligations, and compares it with the equity. In simple terms, the high financial leverage means the cost of production, together with running the business day-to-day, is high, whereas, lower financial leverage implies lower fixed cost investment in the business and generally considered by investors to be a good sign. So if creditors own a majority of Alpha Lithium assets, the company is considered highly leveraged. Understanding the composition and structure of overall Alpha Lithium debt and outstanding corporate bonds gives a good idea of how risky the capital structure of a business is and if it is worth investing in it. Please read more on our technical analysis page.
Watch out for price decline
Please consider monitoring Alpha Lithium on a daily basis if you are holding a position in it. Alpha Lithium is trading at a penny-stock level, and the possibility of delisting is much higher compared to other otcs. However, just because the otc stock is trading under one dollar, does not mean it will be marked for deletion. Most exchanges require public instruments, such as Alpha Lithium stock to be traded above the $1 level to remain listed. If Alpha Lithium otc stock price falls below $1 for 30 consecutive trading days, the exchange can delist it. Once the company reaches this point, they will be sent an initial price violation notice directly from an exchange.
How important is Alpha Lithium's Liquidity
Alpha Lithium financial leverage refers to using borrowed capital as a funding source to finance Alpha Lithium ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. Alpha Lithium 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 Alpha Lithium'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 Alpha Lithium'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 Alpha Lithium's total debt and its cash.
Breaking down the case for Alpha Lithium
Alpha Lithium maintains current valuation of 18.03 m. The latest price spikes of Alpha Lithium Corp could raise concerns from investors as the firm closed today at a share price of 0.64 on 1,101,100 in volume. The company executives may have good odds in positioning the firm resources to exploit market volatility in August. The stock standard deviation of daily returns for 30 days investing horizon is currently 6.37. The very high volatility is mostly attributed to the latest market swings and not very good earnings reports from some of the Alpha Lithium partners.
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