Smiths Group Return On Equity vs. Current Valuation
| QS2A Stock | 20.42 0.66 3.13% |
For Smiths Group profitability analysis, we use financial ratios and fundamental drivers that measure the ability of Smiths Group to generate income relative to revenue, assets, operating costs, and current equity. These fundamental indicators attest to how well Smiths Group plc utilizes its assets to generate profit and value for its shareholders. The profitability module also shows relationships between Smiths Group's most relevant fundamental drivers. It provides multiple suggestions of what could affect the performance of Smiths Group plc over time as well as its relative position and ranking within its peers.
Smiths |
Smiths Group plc Current Valuation vs. Return On Equity Fundamental Analysis
Comparative valuation techniques use various fundamental indicators to help in determining Smiths Group's current stock value. Our valuation model uses many indicators to compare Smiths Group value to that of its competitors to determine the firm's financial worth. Smiths Group plc is currently regarded as top stock in return on equity category among its peers. It is rated below average in current valuation category among its peers reporting about 1,323,971,000,196 of Current Valuation 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 Smiths Group's earnings, one of the primary drivers of an investment's value.Smiths 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.
Smiths Group |
| = | 0.0051 |
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.
Smiths Group |
| = | 6.75 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.
Smiths Profitability Driver Comparison
Profitability drivers are factors that can directly affect your investment outlook on Smiths Group. 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 Smiths Group 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 Smiths Group's important profitability drivers and their relationship over time.
Use Smiths Group 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 Smiths Group 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 Smiths Group will appreciate offsetting losses from the drop in the long position's value.Smiths Group Pair Trading
Smiths Group plc Pair Trading Analysis
The ability to find closely correlated positions to Smiths Group could be a great tool in your tax-loss harvesting strategies, allowing investors a quick way to find a similar-enough asset to replace Smiths Group 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 Smiths Group - 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 Smiths Group plc to buy it.
The correlation of Smiths Group 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 Smiths Group moves, either up or down, the other security will move in the same direction. Alternatively, perfect negative correlation means that if Smiths Group plc 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 Smiths Group 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 Smiths Group position
In addition to having Smiths Group 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 Precious Metals Thematic Idea Now
Precious Metals
Fama and French investing themes focus on testing asset pricing under different economic assumptions. The Precious Metals theme has 61 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 Precious Metals Theme or any other thematic opportunities.
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Additional Tools for Smiths Stock Analysis
When running Smiths Group's price analysis, check to measure Smiths Group's market volatility, profitability, liquidity, solvency, efficiency, growth potential, financial leverage, and other vital indicators. We have many different tools that can be utilized to determine how healthy Smiths Group is operating at the current time. Most of Smiths Group's value examination focuses on studying past and present price action to predict the probability of Smiths Group's future price movements. You can analyze the entity against its peers and the financial market as a whole to determine factors that move Smiths Group's price. Additionally, you may evaluate how the addition of Smiths Group to your portfolios can decrease your overall portfolio volatility.