NAPCO Story

NSSC -- USA Stock

USD 28.65 0.41 1.45%

Macroaxis Story

NL Industries would continue recover faster as its shares surged to 2.61 percent against NAPCO Security's 1.9737%. While some of us are excited about industrials space, we will evaluate how strong are NAPCO Security and NL Industries fundamentals. We are going to analyze some of the competitive aspects of both NAPCO and NL Industries.

Published over three months ago

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Will NL Industries (NYSE:NL) and NAPCO Security (NASDAQ:NSSC) deliver in October?

By analyzing existing basic indicators between NAPCO Security and NL Industries, 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 NL Industries with a short position in NAPCO Security. 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. NAPCO Security has an asset utilization ratio of 132.3 percent. This suggests that the company is making $1.32 for each dollar of assets. An increasing asset utilization means that NAPCO Security 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 NAPCO or Mistras is a better fit for your portfolio, analyzing a few basic fundamental indicators is a good first step.

How important is NAPCO Security's Liquidity

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

Correlation Between NAPCO and Mistras Group

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 NAPCO Security together with similar or unrelated positions with a negative correlation. For example, you can also add Mistras to your portfolio. If Mistras is not perfectly correlated to NAPCO Security 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 NAPCO Security 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 NSSC and MG for more information.

Note

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

Sale by Richard Soloway of 334961 shares of NAPCO Security

Legal trades by NAPCO Security insiders are very common, as founders, directors, or employees of any publicly traded firm often have stock or stock options. These trades are made public in the United States through the filing of Form 4 of the Securities and Exchange Commission. Below entry was recorded recently and is publicly available as an insider trade:

NAPCO insider trading alert for sale of common stock by Richard Soloway, President CEO and Secretary, on 23rd of December 2020. This event was filed by Napco Security Technologi with SEC on 2020-12-23. Statement of changes in beneficial ownership - SEC Form 4. Richard Soloway currently serves as chairman, ceo and president and secretary of NAPCO Security [view details]

Note, although insider trading is legal, in the United States, Canada, Australia, and Germany, for mandatory reporting purposes, corporate insiders are defined as a company's officers, directors, and any beneficial owners of more than 10% of a class of the company's equity securities.

A Deeper look at NAPCO

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 NAPCO Security revenue. Based on the latest financial disclosure, NAPCO Security reported 107.94 M of revenue. This is 96.91% lower than that of the Industrials sector and 86.75% lower than that of the Security & Protection Services industry. The revenue for all United States stocks is 98.86% higher than that of NAPCO Security. As for NL Industries we see revenue of 115.45 M, which is 85.83% lower than that of the Security & Protection Services

Sector

814.9 M

NSSC	107.94 Million	10.4
Sector	814.88 Million	78.48
NL	115.45 Million	11.12

Momentum Analysis of NAPCO Security suggests possible reversal in October

The market risk adjusted performance is down to 6.21 as of today. As of the 7th of September, NAPCO Security secures the mean deviation of 2.26, and Market Risk Adjusted Performance of 6.21. In connection with fundamental indicators, the technical analysis model lets you check helpful technical drivers of NAPCO Security, as well as the relationship between them. Strictly speaking, you can use this information to find out if the entity will indeed mirror its model of past prices, or the prices will eventually revert. We were able to break down and interpolate data for nineteen technical drivers for NAPCO Security, which can be compared to its peers in the industry. Please verify NAPCO Security variance, maximum drawdown, as well as the relationship between the Maximum Drawdown and semi variance to decide if NAPCO Security is priced fairly, providing market reflects its recent price of 23.25 per share. Given that NAPCO Security has jensen alpha of (0.1), we recommend you to check NAPCO Security's last-minute market performance to make sure the company can sustain itself in the future.

Our Final Takeaway

Whereas some other companies under the security & protection services industry are still a bit expensive, NAPCO Security may offer a potential longer-term growth to investors. While some investors may not share our view, we believe it may be a good time to increase your existing holdings in NAPCO as the risk-reward trade off is appealing enough to hold a position. 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 NAPCO Security.

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 NAPCO Security. Please refer to our Terms of Use for any information regarding our disclosure principles.

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