| 2015 | 2016 | 2017 | 2018 | 2019 (projected) | Long Term Debt to Equity | 0.54 | 0.61 | 0.62 | 0.74 | 0.59 | Interest Coverage | 18.09 | 14.74 | 17.70 | 19.34 | 16.26 |
Merck is -0.01 percent down even though market growth
 | By Ellen Johnson | Macroaxis Story |
In this review I will examine Merck. I will concentrate on why it could still be a good year for Merck traders. This firm Piotroski F Score is 5 - Healthy. Considering 30-days investment horizon, Merck is expected to generate 1233.0 times less return on investment than the market. But when comparing it to its historical volatility, the company is 1.01 times less risky than the market. It trades about 0.0 of its potential returns per unit of risk. The market is currently generating roughly 0.1 of returns per unit of risk over similar time horizon. What is Merck Target Price Odds to finish over Current Price? Coming from normal probability distribution, the odds of Merck to move above current price in 30 days from now is about 18.98%. The Merck Company probability density function shows the probability of Merck Stock to fall within a particular range of prices over 30 days . Considering 30-days investment horizon, Merck has beta of 0.0949 indicating as returns on market go up, Merck average returns are expected to increase less than the benchmark. However during bear market, the loss on holding Merck Company will be expected to be much smaller as well. Additionally, the company has a negative alpha implying that the risk taken by holding this equity is not justified. Merck is significantly underperforming Russell 2000 .
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Reviewed by Rifka Kats
MERCK CO INC has roughly 7.1 B in cash with 9.63 B of positive cash flow from operations. This results in cash-per-share (CPS) ratio of 2.78. Merck dividends can provide a clue to current valuation of the stock. The firm one year expected dividend income is about $1.01 per share. Lets now check Merck Short Ratio. Based on latest financial disclosure Merck Company has Short Ratio of 2.44 times. This is 37.44% lower than that of the Healthcare sector, and 17.29% lower than that of Drug Manufacturers - Major industry, The Short Ratio for all stocks is 39.0% higher than Merck.
Please note, it is not enough to conduct a financial or market analysis of a single entity such as Merck. Your research has to be compared to or analyzed against Merck's peers to derive any actionable benefits. When done correctly, Merck's competitive analysis will give you plenty of quantitative and qualitative data to validate your investment decisions or develop an entirely new strategy toward taking a position in Merck Company.
Investing in Merck, just like investing in any other equity instrument, is characterized by a strong risk-return correlation. High risks mean high returns and low risk means lower expected returns. Risk management is the act of identifying and assessing the potential risk and developing strategies to minimize these risks and earn maximum possible profits while holding Merck along with other instruments in the same portfolio. Using conventional technical analysis and fundamental analysis to select individual securities into a portfolio complements risk management and adds value to overall investors' investing strategies.
Sophisticated investors, who have witnessed many market ups and downs, anticipate that the market will even out over time. This tendency of Merck's price to converge to an average value over time is called mean reversion. However, historically, high market prices usually discourage investors that believe in mean reversion to invest, while low prices are viewed as an opportunity to buy.
How important is Merck's Liquidity
Merck financial leverage refers to using borrowed capital as a funding source to finance Merck Company ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. Merck financial leverage is typically calculated by taking the company's all interest-bearing debt and dividing it by total capital. So the higher the debt-to-capital ratio (i.e., financial leverage), the riskier the company. Financial leverage can amplify the potential profits to Merck's owners, but it also increases the potential losses and risk of financial distress, including bankruptcy, if the firm cannot cover its debt costs. The degree of Merck's financial leverage can be measured in several ways, including by ratios such as the debt-to-equity ratio (total debt / total equity), equity multiplier (total assets / total equity), or the debt ratio (total debt / total assets). Please check the breakdown between Merck's total debt and its cash.
Merck Gross Profit
Merck Gross Profit growth is one of the most critical measures in evaluating the company. The Gross Profit growth rate is calculated simply by comparing Merck previous period's values with its current period's values. Each time period you're measuring should be of equal lengths the increase or decrease, in a company's Gross Profit between two periods. Here we show Merck Gross Profit growth over the last 10 years. Please check Merck's gross profit and other fundamental indicators for more details.
Merck Correlation with Peers
Investors in Merck can reduce exposure to individual asset risk by holding a diversified portfolio of assets in addition to a long position in Merck Company. Diversification will allow for the same portfolio return with reduced risk. The correlation table of Merck and its peers is a two-dimensional matrix that shows the correlation coefficient between pairs of securities Merck is related in some way. The cells in the table are color-coded to highlight significantly positive and negative relationships. Each cell shows the correlation between one pair of equities and can be used to run pair trading strategies or create efficient portfolios with your current brokerage. Please check volatility of Merck for more details
A Deeper Perspective
The current investor indifference towards the small price fluctuations of Merck Company may encourage investors to take a closer look at the firm as it closed today at a share price of 85.32 on 7125657.000 in trading volume. The company executives did not add any value to Merck investors in October. However, most investors can still diversify their portfolios with Merck Company to hedge your portfolio against high-volatility market scenarios. The stock standard deviation of daily returns for 30 days (very short) investing horizon is currently 1.2662. The below-average Stock volatility is a good sign for a longer term investment options and for buy-and-hold investors. Merck preserves 38.73 of operating margin. Merck is trading at 85.45 which is 0.01 percent decrease. Started trading at 85.45. Merck Net Current Assets as percentage of Total Assets is decreasing over the last 5 years. Further, Merck Earnings before Tax is decreasing over the last 4 years.
To conclude, we believe that at this point Merck is very steady with low odds of financial distress within the next 2 years. Our ongoing buy-hold-sell recommendation on the organization is Hold.
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