NL NL Industries stock Story

NL -  USA Stock  

USD 7.44  0.05  0.67%

It appears without question that NL Industries may not recover as fast as we have hopped for as its price went down 7.1% today. The company's current daily volatility is 5.01 percent, with a beta of -0.44 and an alpha of 0.39 over DOW. While some millenniums are indifferent towards current market swings, it makes sense to summarize NL Industries based on its technical indicators. We will analyze why NL Industries investors may still consider a stake in the business.
Published over six months ago
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Is NL Industries (NYSE:NL) a new disruptor?
NL Industries reports roughly 134.3 M in cash with 20.34 M of positive cash flow from operations. This results in cash-per-share (CPS) ratio of 2.75. On a scale of 0 to 100, NL Industries holds a performance score of 5. The company owns a Beta (Systematic Risk) of -0.4351, which conveys possible diversification benefits within a given portfolio. Let's try to break down what NL Industries's beta means in this case. As returns on the market increase, returns on owning NL Industries are expected to decrease at a much lower rate. During the bear market, NL Industries is likely to outperform the market. Although it is vital to follow NL Industries existing price patterns, it is good to be conservative about what you can do with the information regarding equity price patterns. The way in which we are 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 analyzing NL Industries technical indicators, you can at this moment evaluate if the expected return of 0.41% will be sustainable into the future. Please exercises NL Industries standard deviation, as well as the relationship between the maximum drawdown and expected short fall to make a quick decision on whether NL Industries current price history will revert.
Investing in NL Industries, 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 NL Industries 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, frequently view the market will even out over time. This tendency of NL Industries' 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 use the tools below to analyze the current value of NL Industries in the context of predictive analytics.
Please note, it is not enough to conduct a financial or market analysis of a single entity such as NL Industries. Your research has to be compared to or analyzed against NL Industries' peers to derive any actionable benefits. When done correctly, NL Industries' competitive analysis will give you plenty of quantitative and qualitative data to validate your investment decisions or develop an entirely new strategy towards taking a position in NL Industries.

How important is NL Industries's Liquidity

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

How NL NL Industries utilizes its cash?

To perform a cash flow analysis of NL Industries, investors first need to understand how to read the cash flow statement. A cash flow statement shows the amount of cash NL Industries is receiving and how much cash it distributes out in a given period. The NL Industries cash flow statement breaks down these inflows and outflows into different buckets, including operating activities, investing activities, and financing activities.
NL Industries Net Cash Flow from Operations is relatively stable at the moment as compared to the past year. The company's current value of Net Cash Flow from Operations is estimated at 19.49 Million

NL Industries Correlation with Peers

Investors in NL NL Industries can reduce exposure to individual asset risk by holding a diversified portfolio of assets in addition to a long position in NL Industries. Diversification will allow for the same portfolio return with reduced risk. The correlation table of NL Industries and its peers is a two-dimensional matrix that shows the correlation coefficient between pairs of securities NL NL Industries is related in some way. The cells in the table are color-coded to highlight significantly positive and negative relationships. Each cell shows the correlation between one pair of equities and can be used to run pair trading strategies or create efficient portfolios with your current brokerage.
Please check volatility of NL NL Industries for more details

An Additional Perspective On NL Industries

NL Industries appears to be risky, given 1 month investment horizon. NL Industries retains Efficiency (Sharpe Ratio) of 0.0822, which conveys that the firm had 0.0822% of return per unit of price deviation over the last month. Our outlook to 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-one technical indicators for NL Industries, which you can use to evaluate future volatility of the firm. Please exercise NL Industries Market Risk Adjusted Performance of (0.85), standard deviation of 4.91, and Mean Deviation of 3.35 to check out if our risk estimates are consistent with your expectations.
Click cells to compare fundamentals   Check Volatility   Backtest Portfolio

High level of complacency for NL Industries after the new price pull down

NL Industries new mean deviation upsurges over 3.35. As of the 7th of November, NL Industries owns the Standard Deviation of 4.91, mean deviation of 3.35, and Market Risk Adjusted Performance of (0.85). In connection with fundamental indicators, the technical analysis model lets you check timely technical drivers of NL Industries, as well as the relationship between them. Strictly speaking, you can use this information to find out if the firm will indeed mirror its model of historical prices and volume patterns, or the prices will eventually revert. We were able to interpolate nineteen technical drivers for NL Industries, which can be compared to its peers in the sector. Please verify NL Industries standard deviation, as well as the relationship between the maximum drawdown and expected short fall to decide if NL Industries is priced some-what accurately, providing market reflects its prevailing price of 4.32 per share. Given that NL Industries has jensen alpha of 0.3866, we recommend you to check NL Industries's latest market performance to make sure the company can sustain itself sooner or later.

Our Bottom Line On NL Industries

While some firms within the security & protection services industry are still a little expensive, even after the recent corrections, NL Industries may offer a potential longer-term growth to stakeholders. To conclude, as of the 7th of November 2020, we believe that at this point, NL Industries is overvalued with close to average odds of financial distress within the next 2 years. Our latest Buy-Hold-Sell recommendation on the company is Strong Sell.

About Contributor

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 Achuva Shats do not own shares of NL Industries. Please refer to our Terms of Use for any information regarding our disclosure principles.

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