LATAM Airlines Cash And Equivalents vs. Operating Margin

LTM Stock  CLP 13.99  0.09  0.64%   
Based on LATAM Airlines' profitability indicators, LATAM Airlines Group 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 LATAM Airlines' ability to earn profits and add value for shareholders.
For LATAM Airlines profitability analysis, we use financial ratios and fundamental drivers that measure the ability of LATAM Airlines to generate income relative to revenue, assets, operating costs, and current equity. These fundamental indicators attest to how well LATAM Airlines Group utilizes its assets to generate profit and value for its shareholders. The profitability module also shows relationships between LATAM Airlines's most relevant fundamental drivers. It provides multiple suggestions of what could affect the performance of LATAM Airlines Group over time as well as its relative position and ranking within its peers.
  
Check out Correlation Analysis.
Please note, there is a significant difference between LATAM Airlines' value and its price as these two are different measures arrived at by different means. Investors typically determine if LATAM Airlines is a good investment by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, LATAM Airlines' 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.

LATAM Airlines Group Operating Margin vs. Cash And Equivalents Fundamental Analysis

Comparative valuation techniques use various fundamental indicators to help in determining LATAM Airlines's current stock value. Our valuation model uses many indicators to compare LATAM Airlines value to that of its competitors to determine the firm's financial worth.
LATAM Airlines Group is currently regarded as number one stock in cash and equivalents category among its peers. It also is currently regarded as number one stock in operating margin category among its peers . Comparative valuation analysis is a catch-all model that can be used if you cannot value LATAM Airlines by discounting back its dividends or cash flows. This model doesn't attempt to find an intrinsic value for LATAM Airlines' 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.

LATAM Operating Margin vs. Cash And Equivalents

Cash or Cash Equivalents are the most liquid of all assets found on the company's balance sheet. It is used in calculating many of the firm's liquidity ratios and is a good indicator of the overall financial health of a company. Companies with a lot of cash are usually attractive takeover targets. Cash Equivalents are balance sheet items that are typically reported using currency printed on notes.

LATAM Airlines

Cash

 = 

Bank Deposits

+

Liquidities

 = 
1.54 B
Cash equivalents represent current assets that are easily convertible to cash such as short term bonds, savings account, money market funds, or certificate of deposits (CDs). One of the important consideration companies make when classifying assets as cash equivalent is that investments they report on their balance sheets under current assets should have almost no risk of change in value over the next few months (usually three months).
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.

LATAM Airlines

Operating Margin

 = 

Operating Income

Revenue

X

100

 = 
(0.03) %
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.

LATAM Operating Margin Comparison

LATAM Airlines is currently under evaluation in operating margin category among its peers.

LATAM Airlines Profitability Projections

The most important aspect of a successful company is its ability to generate a profit. For investors in LATAM Airlines, profitability is also one of the essential criteria for including it into their portfolios because, without profit, LATAM Airlines will eventually generate negative long term returns. The profitability progress is the general direction of LATAM Airlines' change in net profit over the period of time. It can combine multiple indicators of LATAM Airlines, 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.
LATAM Airlines Group S.A., together with its subsidiaries, provides passenger and cargo air transportation services in Peru, Argentina, the United States, Europe, Colombia, Brazil, Ecuador, Chile, the Asia Pacific, and rest of Latin America. On May 26, 2020, LATAM Airlines Group S.A., along with its affiliates, filed a voluntary petition for reorganization under Chapter 11 in the U.S. LATAM AIRLINES is traded on Commodity Exchange in Exotistan.

LATAM Profitability Driver Comparison

Profitability drivers are factors that can directly affect your investment outlook on LATAM Airlines. 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 LATAM Airlines 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 LATAM Airlines' important profitability drivers and their relationship over time.

Use LATAM Airlines 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 LATAM Airlines 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 LATAM Airlines will appreciate offsetting losses from the drop in the long position's value.

LATAM Airlines Pair Trading

LATAM Airlines Group Pair Trading Analysis

The ability to find closely correlated positions to LATAM Airlines could be a great tool in your tax-loss harvesting strategies, allowing investors a quick way to find a similar-enough asset to replace LATAM Airlines 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 LATAM Airlines - 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 LATAM Airlines Group to buy it.
The correlation of LATAM Airlines 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 LATAM Airlines moves, either up or down, the other security will move in the same direction. Alternatively, perfect negative correlation means that if LATAM Airlines Group 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 LATAM Airlines 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.
Pair CorrelationCorrelation Matching

Use Investing Themes to Complement your LATAM Airlines position

In addition to having LATAM Airlines 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.

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Large Value Funds
Large Value Funds Theme
Funds or Etfs that invest in the undervalued stocks of large-sized companies. The Large Value Funds theme has 37 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 Large Value Funds Theme or any other thematic opportunities.
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Additional Information and Resources on Investing in LATAM Stock

When determining whether LATAM Airlines Group is a strong investment it is important to analyze LATAM Airlines' competitive position within its industry, examining market share, product or service uniqueness, and competitive advantages. Beyond financials and market position, potential investors should also consider broader economic conditions, industry trends, and any regulatory or geopolitical factors that may impact LATAM Airlines' future performance. For an informed investment choice regarding LATAM Stock, refer to the following important reports:
Check out Correlation Analysis.
You can also try the Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
To fully project LATAM Airlines' future profitability, investors should examine all historical financial statements. These statements provide investors with a comprehensive snapshot of the financial position of LATAM Airlines Group 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 LATAM Airlines' income statement, its balance sheet, and the statement of cash flows.
Potential LATAM Airlines investors and stakeholders can use historical trends found within financial statements to determine how well the company is positioned for the future. Although LATAM Airlines investors may work on each financial statement separately, they are all related. The changes in LATAM Airlines's assets and liabilities, for example, are also reflected in the revenues and expenses that we see on LATAM Airlines's income statement, which results in the company's gains or losses. Cash flows can provide more information regarding cash listed on a balance sheet but not equivalent to net income shown on the income statement. Please read more on our technical analysis and fundamental analysis pages.