CYREN (NASDAQ:CYRN) high volatility trend continues
 | By Raphi Shpitalnik | Macroaxis Story |
Given the investment horizon of 90 days, CYREN is expected to generate 5.2 times more return on investment than the market. However, the company is 5.2 times more volatile than its market benchmark. It trades about 0.14 of its potential returns per unit of risk. The DOW is currently generating roughly 0.18 per unit of risk. As many adventurous traders are excited about technology space, it is only fair to outline the risk of shorting CYREN based on its current volatility spike. We will evaluate if CYREN's current volatility will continue into September. The latest CYREN risk factors may impact the value of the stock as we estimate CYREN as currently undervalued. The real value is approaching 2.16 per share.
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Reviewed by Vlad Skutelnik
The company currently holds 31.69 M in liabilities with Debt to Equity (D/E) ratio of 1.42, which is about average as compared to similar companies. CYREN has a current ratio of 1.44, which is within standard range for the sector. CYREN holds a performance score of 10 on a scale of zero to a hundred. The firm shows a Beta (market volatility) of -0.3259, which signifies possible diversification benefits within a given portfolio. Let's try to break down what CYREN's beta means in this case. As returns on the market increase, returns on owning CYREN are expected to decrease at a much lower rate. During the bear market, CYREN is likely to outperform the market. Although it is vital to follow CYREN historical returns, it is good to be conservative about what you can do with the information regarding equity current trending patterns. Our philosophy in foreseeing future performance of any stock is to look not only at its past charts but also at the business as a whole, including all fundamental and technical indicators. To evaluate if CYREN expected return of 1.18 will be sustainable into the future, we have found twenty-seven different technical indicators, which can help you to check if the expected returns are sustainable. Use CYREN maximum drawdown, as well as the relationship between the expected short fall and rate of daily change to analyze future returns on CYREN. Volatility is a rate at which the price of Cyren or any other equity instrument increases or decreases for a given set of returns. It is measured by calculating the standard deviation of the annualized returns over a given period of time and shows the range to which the price of Cyren may increase or decrease. In other words, similar to Cyren's beta indicator, it measures the risk of Cyren and helps estimate the fluctuations that may happen in a short period of time. So if prices of Cyren fluctuate rapidly in a short time span, it is termed to have high volatility, and if it swings slowly in a more extended period, it is understood to have low volatility. Please read more on our technical analysis page.
Watch out for price decline
Please consider monitoring Cyren on a daily basis if you are holding a position in it. Cyren is trading at a penny-stock level, and the possibility of delisting is much higher compared to other delisted stocks. However, just because the stock is trading under one dollar, does not mean it will be marked for deletion. Most exchanges require public instruments, such as Cyren stock to be traded above the $1 level to remain listed. If Cyren stock price falls below $1 for 30 consecutive trading days, the exchange can delist it. Once the company reaches this point, they will be sent an initial price violation notice directly from an exchange.
How important is Cyren's Liquidity
Cyren financial leverage refers to using borrowed capital as a funding source to finance Cyren ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. Cyren 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 Cyren'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 Cyren'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 Cyren's total debt and its cash.
A Deeper Perspective
The latest price rise of CYREN could raise concerns from institutional investors as the firm closed today at a share price of 1.61 on 318,793 in volume. The company directors and management may have good odds in positioning the firm resources to exploit market volatility in September. The stock standard deviation of daily returns for 30 days investing horizon is currently 8.2. The very high volatility is mostly attributed to the latest market swings and not very good earnings reports from some of the CYREN partners.
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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 Cyren. Please refer to our Terms of Use for any information regarding our disclosure principles.