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Should we continue shadow F5 Networks (NASDAQ:FFIV) executives?
 | By Ellen Johnson | Macroaxis Story |
It appears F5 Networks may not recover as fast as we have hopped for as its price went down 1.53% today. The company's current daily volatility is 2.26 percent, with a beta of 0.61 and an alpha of 0.23 over DOW. As many millenniums are trying to avoid the latest volatility, we are going to focus on F5 Networks a little further to understand its historical price patterns. Why are we still confident in our projection for a recovery.
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Reviewed by Raphi Shpitalnik
F5 Networks currently holds roughly 821.15 M in cash with 682.25 M of positive cash flow from operations. This results in cash-per-share (CPS) ratio of 13.48. The asset utilization indicator refers to the revenue earned for every dollar of assets a company currently reports. F5 Networks has an asset utilization ratio of 100.16 percent. This indicates that the company is making $1.0 for each dollar of assets. An increasing asset utilization means that F5 Networks is more efficient with each dollar of assets it utilizes for everyday operations.
Please note, it is not enough to conduct a financial or market analysis of a single entity such as F5 Networks. Your research has to be compared to or analyzed against F5 Networks' peers to derive any actionable benefits. When done correctly, F5 Networks' competitive analysis will give you plenty of quantitative and qualitative data to validate your investment decisions or develop an entirely new strategy toward taking a position in F5 Networks.
Investing in F5 Networks, 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 F5 Networks 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.
Sophisticated investors, who have witnessed many market ups and downs, anticipate that the market will even out over time. This tendency of F5 Networks' price to converge to an average value over time is called mean reversion. However, historically, high market prices usually discourage investors that believe in mean reversion to invest, while low prices are viewed as an opportunity to buy.
How important is F5 Networks's Liquidity
F5 Networks financial leverage refers to using borrowed capital as a funding source to finance F5 Networks ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. F5 Networks 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 F5 Networks' 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 F5 Networks' 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 F5 Networks's total debt and its cash.
F5 Networks Gross Profit
F5 Networks Gross Profit growth is one of the most critical measures in evaluating the company. The Gross Profit growth rate is calculated simply by comparing F5 Networks 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 F5 Networks Gross Profit growth over the last 10 years. Please check F5 Networks' gross profit and other fundamental indicators for more details.
F5 Networks Correlation with Peers
Investors in FFIV can reduce exposure to individual asset risk by holding a diversified portfolio of assets in addition to a long position in F5 Networks. Diversification will allow for the same portfolio return with reduced risk. The correlation table of F5 Networks and its peers is a two-dimensional matrix that shows the correlation coefficient between pairs of securities FFIV 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 FFIV for more details
Breaking down the case for F5 Networks
We consider F5 Networks very steady. F5 Networks retains Efficiency (Sharpe Ratio) of 0.0662, which denotes the company had 0.0662% of return per unit of price deviation over the last month. Our outlook to predicting the volatility of a stock is to use all available market data together with stock specific technical indicators that cannot be diversified away. We have found twenty-one technical indicators for F5 Networks, which you can use to evaluate future volatility of the entity. Please confirm F5 Networks Market Risk Adjusted Performance of 0.5704, downside deviation of 2.3, and Standard Deviation of 2.43 to check if the risk estimate we provide is consistent with the expected return of 0.15%.
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