Honda Return On Equity vs. Current Valuation
| HOND34 Stock | BRL 155.40 3.51 2.31% |
For Honda profitability analysis, we use financial ratios and fundamental drivers that measure the ability of Honda to generate income relative to revenue, assets, operating costs, and current equity. These fundamental indicators attest to how well Honda Motor Co utilizes its assets to generate profit and value for its shareholders. The profitability module also shows relationships between Honda's most relevant fundamental drivers. It provides multiple suggestions of what could affect the performance of Honda Motor Co over time as well as its relative position and ranking within its peers.
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Honda Motor Current Valuation vs. Return On Equity Fundamental Analysis
Comparative valuation techniques use various fundamental indicators to help in determining Honda's current stock value. Our valuation model uses many indicators to compare Honda value to that of its competitors to determine the firm's financial worth. Honda Motor Co is one of the top stocks in return on equity category among its peers. It also is rated as one of the top companies in current valuation category among its peers reporting about 5,186,304,495,785 of Current Valuation per Return On Equity. Comparative valuation analysis is a catch-all model that can be used if you cannot value Honda by discounting back its dividends or cash flows. This model doesn't attempt to find an intrinsic value for Honda's Stock. Still, instead, it compares the stock's price multiples to a benchmark or nearest competition to determine if the stock is relatively undervalued or overvalued.Honda Current Valuation 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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| = | 0.0726 |
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.
Enterprise Value is a firm valuation proxy that approximates the current market value of a company. It is typically used to determine the takeover or merger price of a firm. Unlike Market Cap, this measure takes into account the entire liquid asset, outstanding debt, and exotic equity instruments that the company has on its balance sheet. When a takeover occurs, the parent company will have to assume the target company's liabilities but will take possession of all cash and cash equivalents.
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| = | 376.53 B |
Enterprise Value can be a useful tool to compare companies with different capital structures. Long term liability and current cash or cash equivalents can have a huge impact on market valuation of a given company.
Honda Current Valuation vs Competition
Honda Motor Co is rated as one of the top companies in current valuation category among its peers. After adjusting for long-term liabilities, total market size of Auto Manufacturers industry is currently estimated at about 394.98 Billion. Honda totals roughly 376.53 Billion in current valuation claiming about 95% of stocks in Auto Manufacturers industry.
Honda Profitability Driver Comparison
Profitability drivers are factors that can directly affect your investment outlook on Honda. 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 Honda 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 Honda's important profitability drivers and their relationship over time.
Use Honda 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 Honda 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 Honda will appreciate offsetting losses from the drop in the long position's value.Honda Pair Trading
Honda Motor Co Pair Trading Analysis
The ability to find closely correlated positions to Honda could be a great tool in your tax-loss harvesting strategies, allowing investors a quick way to find a similar-enough asset to replace Honda 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 Honda - 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 Honda Motor Co to buy it.
The correlation of Honda 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 Honda moves, either up or down, the other security will move in the same direction. Alternatively, perfect negative correlation means that if Honda Motor 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 Honda 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 Honda position
In addition to having Honda 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 Tips ETFs Thematic Idea Now
Tips ETFs
ETF themes focus on helping investors to gain exposure to a broad range of assets, diversify, and lower overall costs. The Tips ETFs theme has 41 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 Tips ETFs Theme or any other thematic opportunities.
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Additional Information and Resources on Investing in Honda Stock
When determining whether Honda Motor offers a strong return on investment in its stock, a comprehensive analysis is essential. The process typically begins with a thorough review of Honda's financial statements, including income statements, balance sheets, and cash flow statements, to assess its financial health. Key financial ratios are used to gauge profitability, efficiency, and growth potential of Honda Motor Co Stock. Outlined below are crucial reports that will aid in making a well-informed decision on Honda Motor Co Stock:Check out Risk vs Return Analysis. You can also try the Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
To fully project Honda's future profitability, investors should examine all historical financial statements. These statements provide investors with a comprehensive snapshot of the financial position of Honda Motor at a specified time, usually calculated after every quarter, six months, or one year. Three primary documents fall into the category of financial statements. These documents include Honda's income statement, its balance sheet, and the statement of cash flows.