NextDecade Story

NEXT -- USA Stock

USD 2.40 0.05 2.04%

Macroaxis Story

While some baby boomers are getting worried about energy space, we are going to review both, NextDecade and Dorchester Minerals as potential short-horizon investments. We are going to break down some of the competitive aspects of both NextDecade and Dorchester.

Published over a month ago

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Will Dorchester (NASDAQ:DMLP) shadow NextDecade price boost?

By analyzing existing fundamental indicators between NextDecade and Dorchester, you can compare the effects of market volatilities on both companies' prices and check if they can diversify away market risk if combined in one of your portfolios. You can also utilize pair trading strategies for matching a long position in Dorchester with a short position in NextDecade. Check out our pair correlation module for more information.

Let's begin by analyzing the assets. The asset utilization indicator refers to the revenue earned for every dollar of assets a company currently reports. NextDecade has an asset utilization ratio of 60.57 percent. This implies that the company is making $0.61 for each dollar of assets. An increasing asset utilization means that NextDecade is more efficient with each dollar of assets it utilizes for everyday 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 companies, such as NextDecade or Dorchester is a better fit for your portfolio, analyzing a few basic fundamental indicators is a good first step.

How important is NextDecade's Liquidity

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

Correlation Between NextDecade and Dorchester Minerals

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 NextDecade together with similar or unrelated positions with a negative correlation. For example, you can also add Dorchester Minerals to your portfolio. If Dorchester Minerals is not perfectly correlated to NextDecade 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 NextDecade for example, for example, performs excellent and delivers stable returns, the negatively correlated position you locked in as a hedge may drag your returns down. Please check pair correlation details between NEXT and DMLP for more information.

Note

Are you currently holding both NextDecade and Dorchester Minerals in your portfolio? Please note if you are using this as a pair-trade strategy between NextDecade and Dorchester Minerals, 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.

Is NextDecade valued wisely by the market?

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

Lets now check NextDecade revenue. Based on the latest financial disclosure, NextDecade reported 79.72 M of revenue. This is 99.84% lower than that of the Energy sector and 97.58% lower than that of the Oil & Gas E&P industry. The revenue for all United States stocks is 99.16% higher than that of the firm. As for Dorchester Minerals we see revenue of 51.37 M, which is 98.44% lower than that of the Oil & Gas E&P

Sector

3.3 B

NEXT	79.72 Million	2.33
Sector	3.29 Billion	96.17
DMLP	51.37 Million	1.5

NextDecade implied volatility may change after the gain

The skewness is down to 1.8 as of today. NextDecade is displaying above-average volatility over the selected time horizon. Investors should scrutinize NextDecade independently to ensure intended market timing strategies are aligned with expectations about NextDecade volatility.

Our Takeaway on NextDecade Investment

Whereas other companies under the oil & gas e&p industry are still a bit expensive, NextDecade may offer a potential longer-term growth to private investors. To conclude, as of the 12th of December 2020, our research shows that NextDecade is a rather dangerous investment opportunity with a close to average chance of financial distress in the next two years. From a slightly different view, the entity currently appears to be overvalued. Our overall 30 days buy-hold-sell advice on the firm is Cautious Hold.

About Contributor

Ellen Johnson is a Member of Macroaxs Editorial Board. Ellen covers public companies in North America, focusing primarily on valuation and volatility. Six years of experience in 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 Ellen Johnson do not own shares of NextDecade. Please refer to our Terms of Use for any information regarding our disclosure principles.

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