Element Story

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ESI -- USA Stock  

USD 11.31  0.07  0.62%

As many millenniums are trying to avoid basic materials space, it makes sense to concentrate on Element Solutions a little further and try to understand its current market patterns. We will analyze why it could be a much better year for Element Solutions shareholders. What is the firm valuation so far in 2020? We are going to cover Element Solutions perspective on valuation to give investors a better transparency on taking a position in it.
Published over a month ago
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The impact of current bullish trends on Element Solutions (NYSE:ESI)
Element Solutions has 1.9 B in debt with debt to equity (D/E) ratio of 0.89, which is OK given its current industry classification. On a scale of 0 to 100, Element Solutions holds a performance score of 6. The firm shows a Beta (market volatility) of 0.2875, which means not very significant fluctuations relative to the market. Let's try to break down what Element's beta means in this case. As returns on the market increase, Element Solutions returns are expected to increase less than the market. However, during the bear market, the loss on holding Element Solutions will be expected to be smaller as well. Although it is vital to follow Element Solutions historical returns, it is good to be conservative about what you can do with the information regarding equity current trending patterns. The philosophy towards predicting 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 reviewing Element Solutions technical indicators, you can presently evaluate if the expected return of 0.27% will be sustainable into the future. Please utilizes Element Solutions information ratio, downside variance, day median price, as well as the relationship between the treynor ratio and kurtosis to make a quick decision on whether Element Solutions price patterns will revert.
We determine the current worth of Element Solutions using both absolute as well as relative valuation methodologies to arrive at its intrinsic value. In general, an absolute valuation paradigm, as applied to this company, attempts to find the value of Element Solutions based exclusively on its fundamental and basic technical indicators. By analyzing Element Solutions's financials, quarterly and monthly indicators, and related drivers such as dividends, operating cash flow, and various types of growth rates, we attempt to find the most accurate representation of Element Solutions's intrinsic value. In some cases, mostly for established, large-cap companies, we also incorporate more traditional valuation methods such as dividend discount, discounted cash flow, or asset-based models. As compared to an absolute model, our relative valuation model uses a comparative analysis of Element Solutions. We calculate exposure to Element Solutions's market risk, different technical and fundamental indicators, relevant financial multiples and ratios, and then comparing them to Element Solutions's related companies.

Element Solutions Investment Alerts

Element investment alerts and warnings help investors to get more proficient at understanding not only critical technical and fundamental signals but also the significant portfolio-centered indicators. These indicators include beta, alpha, and other risk-related measures that will help you in monitoring Element Solutions performance across your portfolios.Please check all investment alerts for Element

Element Solutions Valuation Ratios as Compared to Competition

Our valuation model uses many indicators to compare Element value to that of its competitors to determine the firm's financial worth. You can analyze the relationship between different fundamental ratios across Element Solutions competition to find correlations between indicators driving the intrinsic value of Element.

How Element utilizes its cash?

To perform a cash flow analysis of Element Solutions, investors first need to understand how to read the cash flow statement. A cash flow statement shows the amount of cash Element Solutions is receiving and how much cash it distributes out in a given period. The Element Solutions cash flow statement breaks down these inflows and outflows into different buckets, including operating activities, investing activities, and financing activities. Element Solutions 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 9.2 Million

Purchase by Christopher Fraser of 1427 shares of Element Solutions

Legal trades by Element Solutions 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:
Element insider trading alert for perchase of common stock par value $0.01 per share by Christopher Fraser, the corporate stakeholder, on 17th of September 2020. This event was filed by Element Solutions 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 Element Solutions Investor Appetite?

The entity reported the last year's revenue of 1.83 B. Total Income to common stockholders was 91.5 M with profit before taxes, overhead, and interest of 788.3 M.
 2014 2015 2019 (projected)
Long Term Debt to Equity1.520.760.87
Interest Coverage2.171.992.29

Margins Breakdown

Element profit margins show the degree to which it makes money. Margin indicators are used not only by investors but also by creditors or Element Solutions itself as indicators of financial health and management effectiveness. Please look more closely at the different varieties of Element Solutions profit margins.
Operating Margin10.99
EBITDA Margin0.18
Gross Margin0.41
Profit Margin0.0539


Element Solutions Average Assets is nearly stable at the moment. Further, Element Solutions Earnings Before Interest Taxes and Depreciation Amortization EBITDA is nearly stable at the moment. Element Solutions Average Assets is nearly stable at the moment. Further, Element Solutions Earnings Before Interest Taxes and Depreciation Amortization EBITDA is nearly stable at the moment.

Element Solutions price drop is confusing

Element Solutions information ratio is up to 0.0. As of the 4th of August, Element Solutions shows the Mean Deviation of 2.24, coefficient of variation of 1621.65, and Downside Deviation of 3.61. Element Solutions technical analysis allows you to utilize historical prices and volume patterns in order to determine a pattern that computes the direction of the firm's future prices. Put another way, you can use this information to find out if the firm will indeed mirror its model of historical prices and volume momentum, or the prices will eventually revert. We were able to analyze and collect data for nineteen technical drivers for Element Solutions, which can be compared to its rivals. Please confirm Element Solutions treynor ratio, and the relationship between the standard deviation and downside variance to decide if Element Solutions is priced favorably, providing market reflects its regular price of 10.85 per share. Given that Element Solutions has jensen alpha of 0.1257, we urge you to verify Element Solutions's prevailing market performance to make sure the company can sustain itself at a future point.

Our Takeaway on Element Solutions Investment

While some companies in the specialty chemicals industry are either recovering or due for a correction, Element Solutions may not be performing as strong as the other in terms of long-term growth potentials. With a less-than optimistic outlook for your 30 days horizon, it may be a good time to short some or all of your Element Solutions holdings as it seems the potential growth was already fully factored into the current price. 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 Element Solutions.

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 Raphi Shpitalnik do not own shares of Element Solutions. Please refer to our Terms of Use for any information regarding our disclosure principles.

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