Home Capital Return On Equity vs. Price To Earning
Taking into consideration Home Capital's profitability measurements, Home Capital Group may not be well positioned to generate adequate gross income at this time. It has a very high probability of underperforming in March. Profitability indicators assess Home Capital's ability to earn profits and add value for shareholders.
Check out Risk vs Return Analysis to better understand how to build diversified portfolios. Also, note that the market value of any company could be closely tied with the direction of predictive economic indicators such as signals in bureau of labor statistics.
Please note, there is a significant difference between Home Capital's value and its price as these two are different measures arrived at by different means. Investors typically determine if Home Capital is a good investment by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, Home Capital's price is the amount at which it trades on the open market and represents the number that a seller and buyer find agreeable to each party.
For Home Capital profitability analysis, we use financial ratios and fundamental drivers that measure the ability of Home Capital to generate income relative to revenue, assets, operating costs, and current equity. These fundamental indicators attest to how well Home Capital Group utilizes its assets to generate profit and value for its shareholders. The profitability module also shows relationships between Home Capital's most relevant fundamental drivers. It provides multiple suggestions of what could affect the performance of Home Capital Group over time as well as its relative position and ranking within its peers.
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Home Capital Group Price To Earning vs. Return On Equity Fundamental Analysis
Comparative valuation techniques use various fundamental indicators to help in determining Home Capital's current stock value. Our valuation model uses many indicators to compare Home Capital value to that of its competitors to determine the firm's financial worth. Home Capital Group is rated # 2 in return on equity category among its peers. It is one of the top stocks in price to earning category among its peers reporting about 115.37 of Price To Earning per Return On Equity. The reason why the comparable model can be used in almost all circumstances is due to the vast number of multiples that can be utilized, such as the price-to-earnings (P/E), price-to-book (P/B), price-to-sales (P/S), price-to-cash flow (P/CF), and many others. The P/E ratio is the most commonly used of these ratios because it focuses on the Home Capital's earnings, one of the primary drivers of an investment's value.Home Price To Earning vs. Return On Equity
Return on Equity or ROE tells company stockholders how effectually their money is being utilized or reinvested. It is a useful ratio when analyzing company profitability or the management effectiveness given the capital invested by the shareholders. ROE shows how efficiently a company utilizes investments to generate income.
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For most industries, Return on Equity between 10% and 30% are considered desirable to provide dividends to owners and have funds for the future growth of the company. Investors should be very careful using ROE as the only efficiency indicator because ROE can be high if a company is heavily leveraged.
Price to Earnings ratio is typically used for current valuation of a company and is one of the most popular ratios that investors monitor daily. Holding a low PE stock is less risky because when a company's profitability falls, it is likely that earnings will also go down as well. In other words, if you start from a lower position, your downside risk is limited. There are also some investors who believe that low Price to Earnings ratio reflects the low pricing because a given company is in trouble. On the other hand, a higher PE ratio means that investors are paying more for each unit of profit.
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Generally speaking, the Price to Earnings ratio gives investors an idea of what the market is willing to pay for the company's current earnings.
Home Price To Earning Comparison
Home Capital is currently under evaluation in price to earning category among its peers.
Home Capital Profitability Projections
The most important aspect of a successful company is its ability to generate a profit. For investors in Home Capital, profitability is also one of the essential criteria for including it into their portfolios because, without profit, Home Capital will eventually generate negative long term returns. The profitability progress is the general direction of Home Capital's change in net profit over the period of time. It can combine multiple indicators of Home Capital, where stable trends show no significant progress. An accelerating trend is seen as positive, while a decreasing one is unfavorable. A rising trend means that profits are rising, and operational efficiency may be rising as well. A decreasing trend is a sign of poor performance and may indicate upcoming losses.
Home Capital Group Inc., through its subsidiary, Home Trust Company, provides residential and nonresidential mortgage lending, securitization of residential mortgage products, consumer lending, and credit card services in Canada. Home Capital Group Inc. was founded in 1986 and is based in Toronto, Canada. Home Capital operates under Mortgage Finance classification in the United States and is traded on OTC Exchange. It employs 814 people.
Home Profitability Driver Comparison
Profitability drivers are factors that can directly affect your investment outlook on Home Capital. Investors often realize that things won't turn out the way they predict. There are maybe way too many unforeseen events and contingencies during the holding period of Home Capital position where the market behavior may be hard to predict, tax policy changes, gold or oil price hikes, calamities change, and many others. The question is, are you prepared for these unexpected events? Although some of these situations are obviously beyond your control, you can still follow the important profit indicators to know where you should focus on when things like this occur. Below are some of the Home Capital's important profitability drivers and their relationship over time.
Use Home Capital in pair-trading
One of the main advantages of trading using pair correlations is that every trade hedges away some risk. Because there are two separate transactions required, even if Home Capital position performs unexpectedly, the other equity can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Home Capital will appreciate offsetting losses from the drop in the long position's value.Home Capital Pair Trading
Home Capital Group Pair Trading Analysis
The ability to find closely correlated positions to KLA Tencor could be a great tool in your tax-loss harvesting strategies, allowing investors a quick way to find a similar-enough asset to replace KLA Tencor when you sell it. If you don't do this, your portfolio allocation will be skewed against your target asset allocation. So, investors can't just sell and buy back KLA Tencor - that would be a violation of the tax code under the "wash sale" rule, and this is why you need to find a similar enough asset and use the proceeds from selling KLA Tencor to buy it.
The correlation of KLA Tencor is a statistical measure of how it moves in relation to other instruments. This measure is expressed in what is known as the correlation coefficient, which ranges between -1 and +1. A perfect positive correlation (i.e., a correlation coefficient of +1) implies that as KLA Tencor moves, either up or down, the other security will move in the same direction. Alternatively, perfect negative correlation means that if KLA Tencor moves in either direction, the perfectly negatively correlated security will move in the opposite direction. If the correlation is 0, the equities are not correlated; they are entirely random. A correlation greater than 0.8 is generally described as strong, whereas a correlation less than 0.5 is generally considered weak.
Correlation analysis and pair trading evaluation for KLA Tencor can also be used as hedging techniques within a particular sector or industry or even over random equities to generate a better risk-adjusted return on your portfolios.Use Investing Themes to Complement your Home Capital position
In addition to having Home Capital in your portfolios, you can quickly add positions using our predefined set of ideas and optimize them against your very unique investing style. A single investing idea is a collection of funds, stocks, ETFs, or cryptocurrencies that are programmatically selected from a pull of investment themes. After you determine your investment opportunity, you can then find an optimal portfolio that will maximize potential returns on the chosen idea or minimize its exposure to market volatility.Did You Try This Idea?
Run Baby Boomer Prospects Thematic Idea Now
Baby Boomer Prospects
Equities with large market capitalization that account for significant contribution to overall economic growth especially within dividend-paying instruments and stocks from healthcare and financial sectors. The Baby Boomer Prospects theme has 73 constituents at this time.
You can either use a buy-and-hold strategy to lock in the entire theme or actively trade it to take advantage of the short-term price volatility of individual constituents. Macroaxis can help you discover thousands of investment opportunities in different asset classes. In addition, you can partner with us for reliable portfolio optimization as you plan to utilize Baby Boomer Prospects Theme or any other thematic opportunities.
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Check out Risk vs Return Analysis to better understand how to build diversified portfolios. Also, note that the market value of any company could be closely tied with the direction of predictive economic indicators such as signals in bureau of labor statistics. You can also try the Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
Other Consideration for investing in Home Pink Sheet
If you are still planning to invest in Home Capital Group check if it may still be traded through OTC markets such as Pink Sheets or OTC Bulletin Board. You may also purchase it directly from the company, but this is not always possible and may require contacting the company directly. Please note that delisted stocks are often considered to be more risky investments, as they are no longer subject to the same regulatory and reporting requirements as listed stocks. Therefore, it is essential to carefully research the Home Capital's history and understand the potential risks before investing.
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