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Should you acquire Check after the recent volatility decline?
 | By Raphi Shpitalnik | Macroaxis Story |
It appears that Check Point may not recover as fast as we have hopped for as its price went down 1.25% today. Check Point Software's current daily volatility is 1.53 percent, with a beta of -0.04 and an alpha of 0.02 over DOW. While some millenniums are indifferent towards current market swings, it makes sense to recap Check Point Software based on its technical indicators. We will look into some reasons why it is still possible for Check Point to maintain above-average margins while minimizing volatility.
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Reviewed by Rifka Kats
Check Point Software currently holds roughly 1.59 B in cash with 1.1 B of positive cash flow from operations. This results in cash-per-share (CPS) ratio of 11.25. Check Point has performance score of 2 on a scale of 0 to 100. The firm shows a Beta (market volatility) of -0.045, which signifies not very significant fluctuations relative to the market. Let's try to break down what Check's beta means in this case. As returns on the market increase, returns on owning Check Point are expected to decrease at a much lower rate. During the bear market, Check Point is likely to outperform the market. Although it is extremely important to respect Check Point Software historical returns, it is better to be realistic regarding the information on equity current trending patterns. The philosophy in foreseeing future performance of any stock is to evaluate the business as a whole together with its past performance, including all available fundamental and technical indicators. By analyzing Check Point Software technical indicators, you can presently evaluate if the expected return of 0.0498% will be sustainable into the future. Check Point Software right now shows a risk of 1.53%. Please confirm Check Point Software standard deviation, as well as the relationship between the maximum drawdown and expected short fall to decide if Check Point Software will be following its price patterns.
Please note, it is not enough to conduct a financial or market analysis of a single entity such as Check Point. Your research has to be compared to or analyzed against Check Point's peers to derive any actionable benefits. When done correctly, Check Point'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 Check Point Software.
Investing in Check Point, 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 Check Point 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 Check Point'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 Check Point's Liquidity
Check Point financial leverage refers to using borrowed capital as a funding source to finance Check Point Software ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. Check Point 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 Check Point'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 Check Point'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 Check Point's total debt and its cash.
Check Point Gross Profit
Check Point Gross Profit growth is one of the most critical measures in evaluating the company. The Gross Profit growth rate is calculated simply by comparing Check Point 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 Check Point Gross Profit growth over the last 10 years. Please check Check Point's gross profit and other fundamental indicators for more details.
Check Point Correlation with Peers
Investors in Check can reduce exposure to individual asset risk by holding a diversified portfolio of assets in addition to a long position in Check Point Software. Diversification will allow for the same portfolio return with reduced risk. The correlation table of Check Point and its peers is a two-dimensional matrix that shows the correlation coefficient between pairs of securities Check 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 Check for more details
A Deeper Perspective On Check Point
We consider Check Point very steady. Check Point Software secures Sharpe Ratio (or Efficiency) of 0.0326, which signifies that the company had 0.0326% of return per unit of standard deviation over the last month. Our philosophy in foreseeing the volatility of a stock is to use all available market data together with stock specific technical indicators that cannot be diversified away. We have found twenty-one technical indicators for Check Point Software, which you can use to evaluate future volatility of the firm. Please confirm Check Point Software risk adjusted performance of 0.0244, and Mean Deviation of 1.15 to double-check if the risk estimate we provide is consistent with the expected return of 0.0498%.
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This story should be regarded as informational only and should not be considered a solicitation to sell or buy any financial products. Macroaxis does not express any opinion as to the present or future value of any investments referred to in this post. This post may not be reproduced without the consent of Macroaxis LLC. Macroaxis LLC and Raphi Shpitalnik do not own shares of Check Point Software. Please refer to our Terms of Use for any information regarding our disclosure principles.