Energy Story

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EFOI -- USA Stock  

USD 7.35  0.21  2.94%

It seems as Energy Focus will continue to recover much faster as its share price surged up 12.55% today. The company's current daily volatility is 51.65 percent, with a beta of 6.05 and an alpha of 6.44 over DOW. While some of us are getting more passionate about electrical equipment, it makes sense to concentrate on Energy Focus in greater detail to make a better estimate of its volatility. We will analyze why it could be a much better year for Energy Focus shareholders.
Published over a month ago
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Is Energy Focus (NASDAQ:EFOI) a new disruptor?
Energy Focus currently holds roughly 2.91 M in cash with (2.56 M) of positive cash flow from operations. This results in cash-per-share (CPS) ratio of 0.92. Energy Focus holds a performance score of 11 on a scale of zero to a hundred. The firm shows a Beta (market volatility) of 6.0521, which means a somewhat significant risk relative to the market. Let's try to break down what Energy's beta means in this case. As the market goes up, the company is expected to outperform it. However, if the market returns are negative, Energy Focus will likely underperform. Although it is essential to pay attention to Energy Focus historical returns, it is also good to be reasonable about what you can do with equity current trending patterns. Our philosophy towards predicting future potential of any stock is to look not only at its past charts but also at the business as a whole, including all available fundamental and technical indicators. To evaluate if Energy Focus expected return of 8.37 will be sustainable into the future, we have found twenty-one different technical indicators, which can help you to check if the expected returns are sustainable. Use Energy Focus treynor ratio, and the relationship between the standard deviation and downside variance to analyze future returns on Energy Focus.
Investing in Energy Focus, 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 Energy Focus 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.

How important is Energy Focus's Liquidity

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

How Energy utilizes its cash?

To perform a cash flow analysis of Energy Focus, investors first need to understand how to read the cash flow statement. A cash flow statement shows the amount of cash Energy Focus is receiving and how much cash it distributes out in a given period. The Energy Focus cash flow statement breaks down these inflows and outflows into different buckets, including operating activities, investing activities, and financing activities. Energy Focus Net Cash Flow from Operations is most likely to decrease significantly in the upcoming years. The last year's value of Net Cash Flow from Operations was reported at (6.62 Million)

Energy Focus Correlation with Peers

Investors in Energy can reduce exposure to individual asset risk by holding a diversified portfolio of assets in addition to a long position in Energy Focus. Diversification will allow for the same portfolio return with reduced risk. The correlation table of Energy Focus and its peers is a two-dimensional matrix that shows the correlation coefficient between pairs of securities Energy 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 Energy for more details

Exercise or conversion by Geraldine McManus of 3000 shares of Energy Focus subject to Rule 16b-3

Legal trades by Energy Focus 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:
Energy insider trading alert for exercise of restricted stock units by Geraldine McManus, the corporate stakeholder, on 17th of September 2020. This event was filed by Energy Focus Inc with SEC on 2020-09-17. 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.

What is driving Energy Focus Investor Appetite?

Energy Focus is out of control given 1 month investment horizon. Energy Focus secures Sharpe Ratio (or Efficiency) of 0.16, which denotes the company had 0.16% of return per unit of risk over the last month. Our standpoint towards predicting the volatility of a stock is to use Energy Focus market data together with company specific technical indicators. We were able to analyze and collect data for twenty-one different technical indicators, which can help you to evaluate if expected returns of 8.37% are justified by taking the suggested risk. Use Energy Focus Mean Deviation of 14.16, downside deviation of 5.22, and Coefficient Of Variation of 624.77 to evaluate company specific risk that cannot be diversified away.
Click cells to compare fundamentals   Check Volatility   Backtest Portfolio

Can Energy Focus build up on the current rise?

The jensen alpha is down to 6.44 as of today. Energy Focus is displaying above-average volatility over the selected time horizon. Investors should scrutinize Energy Focus independently to ensure intended market timing strategies are aligned with expectations about Energy Focus volatility.

Our Final Takeaway

While many other companies under the home furnishings & fixtures industry are still a bit expensive, Energy Focus may offer a potential longer-term growth to stockholders. While some stockholders may not share our view we believe that the current risk-reward utility is not appealing enough to do any trading. Please use our equity advice module to run different scenarios to ensure your current risk level and investment horizon are fully reflective of your current investing preferences in regards to Energy Focus.

About Contributor

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 Gabriel Shpitalnik do not own shares of Energy Focus. Please refer to our Terms of Use for any information regarding our disclosure principles.

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