New Oriental Education has roughly 6.08
B in cash with 934.06
M of positive cash flow from operations. This results in cash-per-share (CPS) ratio of 3.6, which can makes it an attractive takeover target, given it will continue generating positive cash flow.
Investing in Janus Asia, 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 Janus Asia 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 Janus Asia's 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.
Please note, it is not enough to conduct a financial or market analysis of a single entity such as Janus Asia. Your research has to be compared to or analyzed against Janus Asia's peers to derive any actionable benefits. When done correctly, Janus Asia's 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 Janus Asia Equity.
Instrument Allocation
The asset allocation of funds such as Janus Asia usually varies among a different mix of asset classes. Balanced mutual funds invest not only in bonds, which focus primarily on income, and stocks, which aim for investment growth, but also keep some reserve in cash or even exotic instruments. Below we show the current asset allocation of Janus Asia Equity
DetailsAnother Deeper Perspective
We consider New Oriental very risky.
New Oriental Education has Sharpe Ratio of 0.0416, which conveys that the firm had 0.0416% of return per unit of risk over the last 3 months. Our standpoint towards estimating 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-seven
technical indicators for New Oriental, which you can use to evaluate the future volatility of the firm. Please verify New Oriental Education Mean Deviation of 3.39,
risk adjusted performance of 0.0167, and Downside Deviation of 3.95 to check out if the risk estimate we provide is consistent with the expected return of 0.18%.
Will New Oriental newest gain continue?
The semi deviation is down to 3.78 as of today. New Oriental Education shows above-average downside volatility for the selected time horizon. We advise investors to inspect New Oriental Education further and ensure that all market timing and asset allocation strategies are consistent with the estimation of New Oriental future alpha. Understanding different market volatility trends often help investors to time the market. Properly using volatility indicators enable traders to measure New Oriental's stock risk against market volatility during both bullying and bearish trends. The higher level of volatility that comes with bear markets can directly impact New Oriental's stock price while adding stress to investors as they watch their shares' value plummet. This usually forces investors to rebalance their portfolios by buying different stocks as prices fall.
New Oriental Implied Volatility
New Oriental's implied volatility exposes the market's sentiment of New Oriental Education stock's possible movements over time. However, it does not forecast the overall direction of its price. In a nutshell, if New Oriental's implied volatility is high, the market thinks the stock has potential for high price swings in either direction. On the other hand, the low implied volatility suggests that New Oriental stock will not fluctuate a lot when New Oriental's options are near their expiration.
Our Takeaway on New Oriental Investment
Whereas some firms under the education & training services industry are still a bit expensive, New Oriental may offer a potential longer-term growth to private investors. The inconsistency in the assessment between current New Oriental valuation and our trade advice on New Oriental is due to the recent market swings and your selection of investing horizon. 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 New Oriental.
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Vlad Skutelnik is a Macroaxis Contributor. Vlad covers stocks, funds, cryptocurrencies, and ETFs that are traded in North America, focusing primarily on fundamentals, valuation and market volatility. He has many years of experience in fintech, predictive investment analytics, and risk management.
View Profile 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 Vlad Skutelnik do not own shares of Janus Asia Equity. Please refer to our
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