Legg Mason Operating Margin vs. Return On Equity
Considering Legg Mason's profitability and operating efficiency indicators, Legg Mason may not be well positioned to generate adequate gross income at the moment. It has a very high risk of underperforming in January. Profitability indicators assess Legg Mason's ability to earn profits and add value for shareholders.
Check out Correlation 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 population.
Please note, there is a significant difference between Legg Mason's value and its price as these two are different measures arrived at by different means. Investors typically determine if Legg Mason is a good investment by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, Legg Mason'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 Legg Mason profitability analysis, we use financial ratios and fundamental drivers that measure the ability of Legg Mason to generate income relative to revenue, assets, operating costs, and current equity. These fundamental indicators attest to how well Legg Mason utilizes its assets to generate profit and value for its shareholders. The profitability module also shows relationships between Legg Mason's most relevant fundamental drivers. It provides multiple suggestions of what could affect the performance of Legg Mason over time as well as its relative position and ranking within its peers.
Legg |
Legg Mason Return On Equity vs. Operating Margin Fundamental Analysis
Comparative valuation techniques use various fundamental indicators to help in determining Legg Mason's current stock value. Our valuation model uses many indicators to compare Legg Mason value to that of its competitors to determine the firm's financial worth. Legg Mason is currently regarded as number one stock in operating margin category among its peers. It also is currently regarded as number one stock in return on equity category among its peers reporting about 0.29 of Return On Equity per Operating Margin. The ratio of Operating Margin to Return On Equity for Legg Mason is roughly 3.47 . Comparative valuation analysis is a catch-all technique that is used if you cannot value Legg Mason by discounting back its dividends or cash flows. It compares the stock's price multiples to nearest competition to determine if the stock is relatively undervalued or overvalued.Legg Return On Equity vs. Operating Margin
Operating Margin shows how much operating income a company makes on each dollar of sales. It is one of the profitability indicators which helps analysts to understand whether the firm is successful or not making money from everyday operations.
Legg Mason |
| = | 23.19 % |
A good Operating Margin is required for a company to be able to pay for its fixed costs or payout its debt, which implies that the higher the margin, the better. This ratio is most effective in evaluating the earning potential of a company over time when comparing it against a firm's competitors.
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.
Legg Mason |
| = | 6.69 |
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.
Legg Return On Equity Comparison
Legg Mason is currently under evaluation in return on equity category among its peers.
Legg Mason Profitability Projections
The most important aspect of a successful company is its ability to generate a profit. For investors in Legg Mason, profitability is also one of the essential criteria for including it into their portfolios because, without profit, Legg Mason will eventually generate negative long term returns. The profitability progress is the general direction of Legg Mason's change in net profit over the period of time. It can combine multiple indicators of Legg Mason, 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.
Legg Mason, Inc. is a publicly owned asset management holding company. As of July 31, 2020, Legg Mason, Inc. operates as a subsidiary of Franklin Resources, Inc. Legg Mason operates under Asset Management classification in the United States and is traded on NYQ Exchange. It employs 3059 people.
Legg Profitability Driver Comparison
Profitability drivers are factors that can directly affect your investment outlook on Legg Mason. 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 Legg Mason 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 Legg Mason's important profitability drivers and their relationship over time.
Use Legg Mason 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 Legg Mason 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 Legg Mason will appreciate offsetting losses from the drop in the long position's value.Legg Mason Pair Trading
Legg Mason Pair Trading Analysis
The ability to find closely correlated positions to Wynn Resorts could be a great tool in your tax-loss harvesting strategies, allowing investors a quick way to find a similar-enough asset to replace Wynn Resorts 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 Wynn Resorts - 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 Wynn Resorts Limited to buy it.
The correlation of Wynn Resorts 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 Wynn Resorts moves, either up or down, the other security will move in the same direction. Alternatively, perfect negative correlation means that if Wynn Resorts Limited 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 Wynn Resorts 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 Legg Mason position
In addition to having Legg Mason 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?
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FinTech
High long term potential financial entities that are ranging from payment processing, investment management to commercial and investment banking. The FinTech theme has 81 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 FinTech Theme or any other thematic opportunities.
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Check out Correlation 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 population. You can also try the Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
Other Consideration for investing in Legg Stock
If you are still planning to invest in Legg Mason 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 Legg Mason's history and understand the potential risks before investing.
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