You think KNOT Offshore (NYSE:KNOP) debt is an issue for insiders?

KNOT Offshore Partners is scheduled to announce its earnings today. KNOT Offshore Earnings per Diluted Share are very stable at the moment as compared to the past year. KNOT Offshore reported last year Earnings per Diluted Share of 1.55. As of 19th of November 2020, Gross Margin is likely to grow to 0.87, while Earnings before Tax are likely to drop about 53.9 M. As many of us are excited about industrials space, it is fair to recap KNOT Offshore Partners as a unique alternative. I will address a few possible reasons insiders do not currently respect this stock.
Published over a year ago
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Reviewed by Michael Smolkin

The company currently holds 986.39 M in liabilities with Debt to Equity (D/E) ratio of 1.43, which is about average as compared to similar companies. KNOT Offshore has performance score of 2 on a scale of 0 to 100. The company secures a Beta (Market Risk) of -0.4707, which conveys possible diversification benefits within a given portfolio. Let's try to break down what KNOT Offshore's beta means in this case. As returns on the market increase, returns on owning KNOT Offshore are expected to decrease at a much lower rate. During the bear market, KNOT Offshore is likely to outperform the market. Although it is extremely important to respect KNOT Offshore Partners price patterns, it is better to be realistic regarding the information on equity historical price patterns. The approach towards estimating 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 inspecting KNOT Offshore Partners technical indicators, you can now evaluate if the expected return of 0.0866% will be sustainable into the future. KNOT Offshore Partners currently secures a risk of 2.44%. Please verify KNOT Offshore Partners standard deviation, maximum drawdown, as well as the relationship between the Maximum Drawdown and expected short fall to decide if KNOT Offshore Partners will be following its current price movements.
KNOT Offshore financial leverage ratio helps determine the effect of debt on the overall profitability of the company. It measures the total debt position of KNOT Offshore, including all of KNOT Offshore's outstanding debt obligations, and compares it with the equity. In simple terms, the high financial leverage means the cost of production, together with running the business day-to-day, is high, whereas, lower financial leverage implies lower fixed cost investment in the business and generally considered by investors to be a good sign. So if creditors own a majority of KNOT Offshore assets, the company is considered highly leveraged. Understanding the composition and structure of overall KNOT Offshore debt and outstanding corporate bonds gives a good idea of how risky the capital structure of a business is and if it is worth investing in it. Please read more on our technical analysis page.

Understanding KNOT Total Liabilities

KNOT Offshore Partners liabilities are broken down into two parts on the balance sheet. These are short-term (or current) obligations and long-term debt. KNOT Offshore Partners has to fulfill its short-term liabilities in this reporting year and should be no more than 12 months old. Long-term debt, on the other hand, is anything beyond the 12-month payment timeframe. Common short-term liabilities found on KNOT Offshore balance sheet include debt obligations and money owed to different KNOT Offshore vendors, workers, and loan providers. Below is the chart of KNOT short long-term liabilities accounts currently reported on its balance sheet.
You can use KNOT Offshore Partners financial leverage analysis tool to get a better grip on understanding its financial position

How important is KNOT Offshore's Liquidity

KNOT Offshore financial leverage refers to using borrowed capital as a funding source to finance KNOT Offshore Partners ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. KNOT Offshore 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 KNOT Offshore'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 KNOT Offshore'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 KNOT Offshore's total debt and its cash.

A Deeper look at KNOT

KNOT Offshore Partners reported the previous year's revenue of 279.17 M. Net Income was 46.26 M with profit before overhead, payroll, taxes, and interest of 222.43 M.

Asset Breakdown

Total Assets1.6 Billion
Current Assets47.1 Million
Assets Non Current1.55 Billion
Goodwill1.32 Million
Tax Assets352,526

Momentum Analysis of KNOT Offshore suggests possible reversal in December

The value at risk is down to -3.33 as of today. As of the 19th of November, KNOT Offshore secures the mean deviation of 1.73, and Risk Adjusted Performance of 0.027. KNOT Offshore Partners technical analysis lets you operate historical price patterns with an objective to determine a pattern that forecasts the direction of the firm's future prices. Strictly speaking, you can use this information to find out if the firm will indeed mirror its model of past prices, or the prices will eventually revert. We were able to analyze nineteen technical drivers for KNOT Offshore, which can be compared to its peers in the industry. Please verify KNOT Offshore Partners standard deviation, maximum drawdown, as well as the relationship between the Maximum Drawdown and expected short fall to decide if KNOT Offshore Partners is priced more or less accurately, providing market reflects its recent price of 13.51 per share. Given that KNOT Offshore Partners has jensen alpha of 0.073, we recommend you to check KNOT Offshore's last-minute market performance to make sure the company can sustain itself at some point in the future.

The Bottom Line

Although some other firms within the marine shipping industry are still a little expensive, even after the recent corrections, KNOT Offshore may offer a potential longer-term growth to insiders. With an impartial outlook on the current market volatility, it may be better to hold off any inventment activity and neither buy nor sell any shares of KNOT Offshore at this time. The KNOT Offshore Partners risk-reward trade off is not appealing enough to do any trading. 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 KNOT Offshore.

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Editorial Staff

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