Neogen Corporation (NEOG) has been struggling with a negative Jensen Alpha of -0.06, indicating underperformance compared to the expected return of the market. Coupled with a negative profit margin of
3% and a diluted EPS of
-0.16, it's clear that the company's
financial health is not at its best. On the other hand, Guardant Health (GH) offers enhanced investment opportunities with a robust end period cash flow of
$163.2M and a promising market risk adjusted performance of 0.1505, suggesting a better risk-reward trade-off.
Main Takeaways
Upon examining the fundamental indicators between Neogen and Guardant, one can evaluate the impact of market volatilities on both companies' prices and ascertain if they can mitigate market risk when combined in a single portfolio. Pair trading strategies can also be utilized, which could involve matching a long position in Guardant with a short position in Neogen. For more information, refer to our
pair correlation module.
Moving on to the analysis of assets, the asset utilization indicator reflects the revenue generated for every dollar of assets a company currently possesses. Neogen has an asset utilization ratio of 18.06 percent, suggesting that the company generates $0.18 for each dollar of assets. An upward trend in asset utilization signifies that Neogen is becoming more efficient in utilizing each dollar of assets in its daily operations.
Out of tens of thousands of stocks, funds, and ETFs that trade on global exchanges each represent an individual company which you can analyze using comparative analysis. To determine which one of the two entities, such as Neogen or Qiagen is a better fit for your portfolio, analyzing a few basic fundamental indicators is a good first step.
How important is Neogen's Liquidity
Neogen
financial leverage refers to using borrowed capital as a funding source to finance Neogen ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. Neogen 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 Neogen'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 Neogen'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 Neogen's total debt and its cash.
Correlation Between Neogen and Qiagen NV
In general, Stock analysis is a method for investors and traders to make individual buying and selling decisions. Stock correlation analysis is also essential because it can help investors realize that they may not be as diversified as they think. Risk management strategies are usually required to make sure all portfolios are properly aligned against their risk tolerance level. You can consider holding Neogen together with similar or unrelated positions with a negative correlation. For example, you can also add Qiagen NV to your portfolio. If Qiagen NV is not perfectly correlated to Neogen it will diversify some of the market risks out of the positively correlated stocks in your portfolio. However, the disadvantage of this sort of hedging is that it can potentially affect your investment returns throughout market cycles. When Neogen, for example, performs excellent and delivers stable returns, the negatively correlated position you locked in as a hedge may drag your returns down.
Are you currently holding both Neogen and Qiagen NV in your portfolio? Please note if you are using this as a pair-trade strategy between Neogen and Qiagen NV, watch out for correlation discrepancy over time. Relying on the historical price correlations and assuming that it will not change may lead to short-term losses. Please check
pair correlation details between NEOG and QGEN for more information.
A Deeper look at Neogen
Revenue is income that a firm generates from business activities such us rendering services or selling goods to customers. It is a crucial part of a business and an essential item when evaluating a company's financial statements. Revenues from a firm's primary business operations can be reported on the income statement as sales revenue, net sales, or simply sales, depending on the industry in which a given company operates.
Revenue is typically recorded when cash or cash equivalents are exchanged for services or goods and can include product or services discounts, promotions, as well as early payments on invoices or services rendered in advance.
Revenue Breakdown
Let me now analyze Neogen revenue. Based on the latest financial disclosure, Neogen reported 822.45
M of revenue. This is 89.22% lower than that of the Health Care Equipment & Supplies sector and 58.49% lower than that of the
Health Care industry. The revenue for all United States stocks is 91.28% higher than that of Neogen.
As for Guardant Health we see revenue of 449.54
M, which is 77.31% lower than that of the Health Care
| Neogen | 822.45 Million |
| Sector | 1.98 Billion |
| Guardant | 449.54 Million |
"Buy low, sell high" is a well-known investment adage that may be applicable to shareholders of Neogen Corporation (NEOG) considering a pivot to Guardant Health (GH). Despite Neogen's impressive current ratio of 9.07X and a substantial end period cash flow of $163.2M, the company's operating margin is a mere 0.09%, indicating a low profitability. Furthermore, the company reported losses with earnings per share at -$0.16. On the other hand, Guardant Health operates in the same industry of Diagnostics & Research, potentially offering a familiar investment landscape for Neogen's shareholders. The decision to pivot could be influenced by Neogen's high risk, as indicated by a downside deviation of 2.1 and a beta of 1.13. However, investors should also consider the company's substantial net assets of $4.55B and a low PEG ratio of 0.6575, which suggests that the stock may be undervalued. In conclusion, while Neogen presents certain financial challenges, it also offers potential opportunities that should be carefully weighed against the prospects of Guardant Health. .
Will Neogen growth be reasonable after the rise?
Neogen Corporation's stock has recently exhibited notable growth, yet the current variance of 5.56 suggests a certain degree of volatility. This suggests that while the stock holds potential for further growth, it may also undergo significant price fluctuations. Therefore, investors should approach this stock with caution, carefully weighing the risk-reward balance. Despite the company's promising growth prospects, the high variance could result in unexpected losses if the stock's price swings unfavorably. Currently, Neogen displays a below-average downside deviation. It has an Information Ratio of 0.0 and a Jensen Alpha of -0.06. However, we recommend investors to further scrutinize Neogen's expected returns to ensure all indicators align with the current outlook about its relatively low value at risk. Understanding various
market volatility trends often assists investors in timing the market.
Appropriate use of volatility indicators allows traders to measure Neogen's stock risk against market volatility during both bullish and bearish trends. The heightened level of volatility that accompanies bear markets can directly impact
Neogen's stock price, adding stress to investors as they watch the value of their shares plummet. This typically compels investors to rebalance their portfolios by purchasing different stocks as prices decline. In conclusion, Neogen (NEOG) presents a compelling investment opportunity based on its current valuation and analyst consensus. With a market value of
19.84 and a real value of
20.79, the stock is trading at a discount, indicating potential for capital appreciation. The
analyst consensus is a 'Buy', with two strong buy recommendations, further reinforcing the positive outlook. The estimated EPS for the next fiscal year ending in May is 0.82, suggesting robust earnings potential. Therefore, considering these factors, investors should consider adding Neogen to their portfolio. .
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Nico Santiago is a PR Contributor to Macroaxis Editorial Board. Nico is a relatively new author here at Macroaxis and he likes to work on advertising and sponsored content and marketing for the company. Nico spends most of his time surfing when the weather is nice and he spends the rest of the year writing for various blogs and companies, as he works on his upcoming books, The Rise of the Financial Machines and Time Series Modelling with AI.
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