Should you take in more of Ituran (NASDAQ:ITRN) based on latest volatility?
 | By Raphi Shpitalnik | Macroaxis Story |
Given the investment horizon of 60 days Ituran Location is expected to under-perform the market. In addition to that, the company is 1.1 times more volatile than its market benchmark. It trades about -0.16 of its total potential returns per unit of risk. The DOW is currently generating roughly 0.03 per unit of volatility. As many adventurous traders are excited about technology space, it is only fair to outline the risk of shorting Ituran Location based on its current volatility spike. We will inspect why some institutional investors are closely monitoring Ituran Location's volatility.
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Reviewed by Rifka Kats
The company conducts business under Technology sector and is part of Communication Equipment industry. Volatility is a rate at which the price of Ituran Location 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 Ituran Location may increase or decrease. In other words, similar to Ituran's beta indicator, it measures the risk of Ituran Location and helps estimate the fluctuations that may happen in a short period of time. So if prices of Ituran Location 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 Ituran Location's Liquidity
Ituran Location financial leverage refers to using borrowed capital as a funding source to finance Ituran Location and ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. Ituran Location 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 Ituran Location'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 Ituran Location'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 Ituran Location's total debt and its cash.
Ituran Location Gross Profit
Ituran Location Gross Profit growth is one of the most critical measures in evaluating the company. The Gross Profit growth rate is calculated simply by comparing Ituran Location 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 Ituran Location Gross Profit growth over the last 10 years. Please check Ituran Location's gross profit and other fundamental indicators for more details.
Ituran Location Volatility Drivers
Ituran Location unsystematic risk is unique to Ituran Location 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 Ituran Location you can also buy Desktop Metal. You can also mitigate this risk by investing in the information technology 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 Ituran Location 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 Ituran Location income statement and balance sheet. Here are more details about Ituran volatility.Click cells to compare fundamentals
A Deeper Perspective
Ituran Location reported the previous year's revenue of 281.52 M. Net Income was 34.35 M with profit before overhead, payroll, taxes, and interest of 126.48 M.
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