Loop Industries is currently undervalued, trading at $4.41 per share, with modest growth projections on the horizon. However, it's important to note that Loop Industries presents a relatively high level of risk for a three-month investment horizon. Loop Industries has a Sharpe Ratio of 0.0576, indicating that the company has generated a 0.0576% return per unit of risk over the past three months.
When estimating the volatility of a stock, it's advisable to use all available market data in conjunction with stock-specific technical indicators that cannot be diversified away. For Loop Industries, we have identified twenty-one technical indicators that can be used to evaluate the company's future volatility.
Investors are encouraged to consider Loop Industries' Risk Adjusted Performance of 0.031, downside deviation of 3.32, and Mean Deviation of 3.15 to determine if the risk estimates align with their investment expectations.
Additional evaluation
Loop Industries (NASDAQ: LOOP), a specialty chemicals company, has recently seen a surge in its stock price. A look at its
fundamental indicators reveals a mixed picture. On the positive side, the company has a robust current ratio of
4.53X, indicating a strong ability to meet its short-term liabilities with its short-term assets. Its current assets stand at a solid
$126.19 million, further reinforcing its financial stability. However, there are also areas of concern. Loop Industries has a significant free cash flow loss of
$35.9 million, indicating that it is spending more cash than it is generating, which could be a red flag for potential investors. Additionally, the company's diluted earnings per share (EPS) is at a loss of
$0.22, suggesting that it is not currently generating profits on a per-share basis. Moreover, only
6.70% of Loop's shares are owned by institutions, which is relatively low and could indicate a lack of confidence from large institutional investors. This, coupled with the company's negative free cash flow and EPS, may give potential investors pause. In conclusion, while Loop Industries' strong current ratio and asset base suggest a degree of financial stability, its negative free cash flow and EPS, as well as the low institutional ownership, present potential risks. Investors should weigh these factors carefully when considering an investment in Loop Industries.
Loop Industries (NASDAQ: LOOP), a player in the Chemicals sector, has recently seen a surge in its stock price. This has prompted a closer look at the company's
fundamental indicators to assess its stability. Loop Industries has a total stockholder equity of
$33.7 million, which is a key measure of a company's net value, indicating the proportion of the company's value that can be claimed by shareholders. The company's current ratio stands at 4.53X, suggesting that it has a healthy liquidity position and can easily meet its short-term obligations. However, Loop's total revenue is a modest $172.8K, with a gross profit of the same amount. This figure is dwarfed by the company's enterprise value of
$109.6 million. The company's net income from continuing operations stands at a loss of $21.3 million, indicating that it is currently not profitable. The company's EPS estimate for the current year is -$0.75, which, coupled with a Price to Earnings To Growth ratio of 0.89X, suggests that investors are expecting the company's earnings to decline in the future. The book value per share is $0.57, which is less than the Wall Street target price of $6.6. Loop Industries has cash and short-term investments amounting to $29.6 million, but it has seen a decrease in cash of $13.5 million. The company's property, plant, and equipment are valued at $2.5 million. The company's liabilities and stockholders' equity total $40.6 million, with a change in working capital of -$5.4 million and a change to liabilities of -$4.6 million. The company's shares short stand at 1.7 million. In conclusion, while Loop Industries has a strong liquidity position and a healthy stockholder equity, its low revenue, high net loss, and negative changes in working capital and cash could pose challenges to its stability. At present, Loop Industries' Book Value per Share remains relatively stable compared to the previous year. As of October 10, 2023, the Current Ratio is projected to rise to 13.86, while the Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) are expected to increase to $16.9 million. Loop Industries is set to announce its earnings today, with the forthcoming quarterly report anticipated on October 11, 2023.
As some conservative investors are steering clear of the chemicals sector, we will delve deeper into Loop Industries to elucidate its current market opportunities. We will explore the reasons why it is still plausible for the company to generate above-average returns. The question remains: will retail investors continue to hold, or should we anticipate a sell-off?
Although in the United States, the Securities and Exchange Commission has enforced strong rules to prevent insiders from engaging in insider trading, finding insiders among active shareholders of Loop Industries is not uncomon. Institutional investor usually refers to an organization that invests money in Loop Industries on behalf of clients or other money managers. Buying and selling of large positions of Loop Industries stock by institutional investors can create supply and demand imbalances that result in sudden price moves of Loop Industries stock. Let's take a look at how the ownership of Loop is distributed among investors.
Ownership Allocation
Loop Industries maintains a total of fourty-seven million five hundred twenty-one thousand two hundred
outstanding shares. Loop Industries secures majority of its outstanding shares owned by
insiders. An
insider is usually defined as a corporate executive, director, member of the board or
institutional investor who own at least 10% of the company's outstanding shares. 60.079 % of Loop Industries
outstanding shares that are owned by
insiders conveys that they have been buying or selling the stock in recent months in anticipation of some upcoming event. Please note that no matter how much assets the company has, if the real value of the firm is less than the current market value, you may not be able to make money on it.
| Retail Investors33.22% | Insiders60.08% | Institutions6.7% |
| Retail Investors | 33.22 |
| Insiders | 60.08 |
| Institutions | 6.7 |
Asset Utilization
The asset utilization indicator refers to the revenue earned for every dollar of assets a company currently reports. Loop Industries has an asset utilization ratio of 0.43 percent. This connotes that the company is making $0.004261 for each dollar of assets. An increasing asset utilization means that Loop Industries is more efficient with each dollar of assets it utilizes for everyday operations.
| Current Assets | 37.34 Million | 81.97 |
| Assets Non Current | 6.55 Million | 14.38 |
| Goodwill | 743,612 | 1.63 |
| Tax Assets | 915,549 | 2.01 |
Loop Industries (NASDAQ: LOOP), a key player in the Basic Materials sector, has recently experienced a surge in its stock. The company's fundamentals, however, indicate that this surge may not be sustainable in the long-term. Loop reported an operating loss of $38.1M and a net income loss from continuing operations of $21.3M, suggesting a weak financial position. The company's total assets stand at $40.56M, with net tangible assets of $32.5M, indicating a narrow asset base. Moreover, the company's EPS estimate for the current year is -0.75, implying further potential losses. Loop's total current liabilities stand at $3.6M, with a short and long term debt total of $3.3M. The company's shares float is 23.2M, with 1.74M shares shorted, indicating a high short ratio of 57.39X. Furthermore, the company's retained earnings to total equity ratio is negative, standing at -$155.9M. This indicates that the company has been unable to generate positive earnings and has been financing its operations through equity. The company's debt to equity ratio is 0.12%, showing low leverage but also hinting at potential difficulties in securing financing. Overall, Loop Industries'
fundamental indicators suggest that the company's recent stock surge may not be based on solid financial footing. Investors should consider these factors carefully before making investment decisions.
Will Loop continue to spike?
The latest standard deviation for Loop Industries has surged past 4.06, indicating a significant degree of volatility in the stock's trading pattern. This suggests that the stock's price is experiencing more fluctuation than usual, which could be a sign of increased investor interest or uncertainty. Given this heightened volatility, there's a possibility that Loop Industries' stock could continue to spike. However, investors should proceed with caution as high volatility can also signify greater risk. It's essential to closely monitor the stock and consider the company's
fundamentals and market conditions before making any investment decisions. Loop Industries displays above-average downside volatility for the selected time horizon. We advise investors to further inspect Loop Industries and ensure that all
market timing and asset allocation strategies are in line with the estimation of Loop Industries' future alpha. Understanding different
market volatility trends can often assist investors in timing the market. Correctly utilizing volatility indicators allows traders to measure Loop Industries' stock risk against market volatility during both bullish and bearish trends.
The elevated level of volatility that accompanies bear markets can directly impact
Loop Industries' stock price, adding stress to investors as they watch their share values decrease. This typically compels investors to rebalance their portfolios by purchasing different stocks as prices fall. In conclusion, the recent price surge in Loop Industries stock (USA Stocks: LOOP) may not be entirely justified. The company's valuation market value is currently at
3.53, while its real value is estimated at
4.41. Despite the strong buy consensus from the single analyst covering the stock, the estimated target price is only 6, which is significantly lower than the possible upside price of 7.23. The naive expected forecast value is even lower at 3.11. Furthermore, the company's fiscal year end in February could bring about additional volatility. Investors should tread carefully and consider these factors before making a decision. The potential downside price of 0.0353 suggests that there could be substantial risk involved. .
Aina Ster is a Member of Macroaxis Editorial Board. Aina delivers weekly perspective on ongoing market and economic trends, analysis and tips from predictive analysis to forecasting across various financial instruments.
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