Is II VI (NASDAQ:IIVI) a good hedge for your existing portfolios?
 | By Rifka Kats | Macroaxis Story |
Given the investment horizon of 90 days II VI is expected to generate 2.84 times more return on investment than the market. However, the company is 2.84 times more volatile than its market benchmark. It trades about 0.36 of its potential returns per unit of risk. The DOW is currently generating roughly 0.14 per unit of risk. As many investors are getting excited about technology space, it is fair to concentrate on II VI Incorporated. We are going to examine if the current expected returns justify II VI's volatility.
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Reviewed by Gabriel Shpitalnik
II VI Incorporated currently holds roughly 683.99 M in cash with 457.23 M of positive cash flow from operations. This results in cash-per-share (CPS) ratio of 6.65. Volatility is a rate at which the price of II VI 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 II VI may increase or decrease. In other words, similar to IIVI's beta indicator, it measures the risk of II VI and helps estimate the fluctuations that may happen in a short period of time. So if prices of II VI 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 II VI's Liquidity
II VI financial leverage refers to using borrowed capital as a funding source to finance II VI Incorporated ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. II VI 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 II VI's 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 II VI's 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 II VI's total debt and its cash.
Another angle On II VI
II VI Incorporated reported the previous year's revenue of 2.77 B. Net Loss for the year was (1.21 M) with profit before overhead, payroll, taxes, and interest of 907.25 M.
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