Edesa Story

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EDSA -- USA Stock  

USD 5.79  0.66  12.87%

45% of stocks are less volatile than Edesa, and 99% of all traded equity instruments are projected to make higher returns than the company over the 60 days investment horizon. While many risk-averse investors are getting carried away by overanalyzing healthcare space, it is reasonable to go over Edesa Biotech. We will analyze why some investors are closely monitoring Edesa Biotech's volatility. Edesa Biotech high volatility, while potentially profitable, can lead to more considerable losses for your portfolios.
Published over a month ago
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Edesa Biotech (NASDAQ:EDSA) high volatility trend continues
Edesa Biotech currently holds roughly 7.21 M in cash with (4.99 M) of positive cash flow from operations. This results in cash-per-share (CPS) ratio of 0.75. The firm shows a Beta (market volatility) of -0.2163, which means not very significant fluctuations relative to the market. Let's try to break down what Edesa's beta means in this case. As returns on the market increase, returns on owning Edesa Biotech are expected to decrease at a much lower rate. During the bear market, Edesa Biotech is likely to outperform the market. Even though it is essential to pay attention to Edesa Biotech historical returns, it is always good to be careful when utilizing equity current trending patterns. Our philosophy towards predicting any stock's future performance is to check both, its past performance charts as well as the business as a whole, including all available technical indicators. Edesa Biotech exposes twenty-eight different technical indicators, which can help you to evaluate its performance. Edesa Biotech has an expected return of -0.39%. Please be advised to confirm Edesa Biotech coefficient of variation, maximum drawdown, skewness, as well as the relationship between the total risk alpha and downside variance to decide if Edesa Biotech stock performance from the past will be repeated at some point in the near future.
Volatility is a rate at which the price of Edesa Biotech 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 Edesa Biotech may increase or decrease. In other words, similar to Edesa's beta indicator, it measures the risk of Edesa Biotech and helps estimate the fluctuations that may happen in a short period of time. So if prices of Edesa Biotech 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 Edesa Biotech's Liquidity

Edesa Biotech financial leverage refers to using borrowed capital as a funding source to finance Edesa Biotech ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. Edesa Biotech 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. Please check the breakdown between Edesa Biotech's total debt and its cash.

How Edesa utilizes its cash?

To perform a cash flow analysis of Edesa Biotech, investors first need to understand how to read the cash flow statement. A cash flow statement shows the amount of cash Edesa Biotech is receiving and how much cash it distributes out in a given period. The Edesa Biotech cash flow statement breaks down these inflows and outflows into different buckets, including operating activities, investing activities, and financing activities. Edesa Biotech Net Cash Flow from Operations is projected to increase significantly based on the last few years of reporting. The past year's Net Cash Flow from Operations was at (1.29 Million)

Edesa Biotech Volatility Drivers

Edesa Biotech unsystematic risk is unique to Edesa Biotech 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 Edesa Biotech you can also buy DiaMedica Therapeutics. You can also mitigate this risk by investing in the biotechnology 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 Edesa Biotech 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 Edesa Biotech income statement and balance sheet. Here are more details about Edesa volatility.
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Exercise of in-the-money or at-the-money derivative position by Pay Paul William of 1218 shares of Edesa Biotech

Legal trades by Edesa Biotech insiders are very common, as founders, directors, or employees of any publicly traded firm often have stock or stock options. These trades are made public in the United States through the filing of Form 4 of the Securities and Exchange Commission. Below entry was recorded recently and is publicly available as an insider trade:
Edesa insider trading alert for exercise of common share warrants (right to buy) by Pay Paul William, the corporate stakeholder, on 10th of November 2020. This event was filed by Edesa Biotech Inc with SEC on 2020-11-10. Statement of changes in beneficial ownership - SEC Form 4 [view details]   
Note, although insider trading is legal, in the United States, Canada, Australia, and Germany, for mandatory reporting purposes, corporate insiders are defined as a company's officers, directors, and any beneficial owners of more than 10% of a class of the company's equity securities.

Breaking down Edesa Biotech Indicators

This firm reported the previous year's revenue of 328.8 K. Net Loss for the year was (6.36 M) with profit before overhead, payroll, taxes, and interest of 311.2 K.

Can Edesa Biotech build up on the current rise?

Current mean deviation is at 3.13. Edesa Biotech exhibits very low volatility with skewness of -0.13 and kurtosis of 0.65. However, we advise investors to further study Edesa Biotech technical indicators to make sure all market info is available and is reliable.

Our Final Perspective on Edesa Biotech

Whereas many other companies under the biotechnology industry are still a bit expensive, Edesa Biotech may offer a potential longer-term growth to investors. The bottom line, as of the 11th of December 2020, we believe that at this point, Edesa Biotech is moderately volatile with close to average chance of distress within the next 2 years. From a slightly different point of view, the entity appears to be undervalued. Our present 30 days 'Buy-vs-Sell' recommendation on the company is Cautious Hold.

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