Is Denison Mines (NYSEMKT:DNN) positioned to overcome the latest market swings?
 | By Raphi Shpitalnik | Macroaxis Story |
Denison Mines is generating negative expected returns assuming volatility of 4.542% on return distribution over 90 days investment horizon. As many investors are getting excited about energy space, it is fair to outline Denison Mines Corp. We will inspect why some institutional investors are closely monitoring Denison Mines' volatility. The latest above-average Denison Mines' volatility may impact the value of the stock as we project Denison Mines as currently undervalued. The real value, according to our calculations, is approaching 0.43 per share.
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Reviewed by Gabriel Shpitalnik
Denison Mines Corp has 7.63 M in debt with debt to equity (D/E) ratio of 0.0, which may show that Denison Mines is not taking advantage of profits from borrowing. The entity has a current ratio of 2.67, demonstrating that it is liquid and is capable to disburse its financial commitments when the payables are due. Volatility is a rate at which the price of Denison Mines 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 Denison Mines may increase or decrease. In other words, similar to Denison's beta indicator, it measures the risk of Denison Mines and helps estimate the fluctuations that may happen in a short period of time. So if prices of Denison Mines 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.
How important is Denison Mines's Liquidity
Denison Mines financial leverage refers to using borrowed capital as a funding source to finance Denison Mines Corp ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. Denison Mines 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 Denison Mines' 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 Denison Mines' 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 Denison Mines's total debt and its cash.
Denison Mines Gross Profit
Denison Mines Gross Profit growth is one of the most critical measures in evaluating the company. The Gross Profit growth rate is calculated simply by comparing Denison Mines 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 Denison Mines Gross Profit growth over the last 10 years. Please check Denison Mines' gross profit and other fundamental indicators for more details.
Denison Mines Volatility Drivers
Denison Mines unsystematic risk is unique to Denison Mines Corp and usually not directly affected by the market or economic environment. An example of unsystematic risk is the possibility of poor earnings or a layoff due to coronavirus. One may mitigate nonsystematic risk by buying different securities in the same industry or by buying in different sectors. For example, if you have a position in Denison Mines you can also buy Energy Fuels. You can also mitigate this risk by investing in the energy sector as well as in companies having nothing to do with it. This type of risk is also called diversifiable risk and can be understood from analyzing Denison Mines important indicators over time. Here we run a correlation analysis between relevant fundamental ratios over at least ten year period to find a relationship in the way they react to changes in Denison Mines income statement and balance sheet. Here are more details about Denison volatility.Click cells to compare fundamentals
Breaking it down a bit more
The big decline in price over the last few months for Denison Mines Corp could raise concerns from institutional investors as the firm it trading at a share price of 0.35 on slow start in volume. The company executives failed to add value to investors and positioning the firm supply of money to exploit market volatility in October. However, diversifying your holdings with Denison Mines Corp or any similar stocks can still protect your portfolios during high-volatility market scenarios. The stock standard deviation of daily returns for 30 days investing horizon is currently 4.54. This high volatility is attributed to the latest market swings and not so good earnings reports for some of the Denison Mines partners.
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