O2Micro Story

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OIIM -- USA Stock  

USD 3.19  0.11  3.57%

O2Micro International is currently generating 1.6723% in daily expected returns and assumes 7.2702% risk (volatility on return distribution) over the 60 days horizon. Although many risk-takers are getting more into technology space, some of us are not very happy with O2Micro International's current volatility. We will evaluate if O2Micro International's current volatility will continue into September. The new O2Micro risk factors may impact the value of the stock as we estimate O2Micro International as currently undervalued. The real value is approaching 4.91 per share.
Published over a month ago
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How risky is to double down on O2Micro International in September?
O2Micro International Limited currently holds roughly 44.7 M in cash with (8.62 M) of positive cash flow from operations. This results in cash-per-share (CPS) ratio of 1.67. O2Micro International holds a performance score of 15 on a scale of zero to a hundred. The firm holds a Beta of -0.4931, which implies possible diversification benefits within a given portfolio. Let's try to break down what O2Micro's beta means in this case. As returns on the market increase, returns on owning O2Micro International are expected to decrease at a much lower rate. During the bear market, O2Micro International is likely to outperform the market. Although it is essential to pay attention to O2Micro International current trending patterns, it is also good to be reasonable about what you can do with equity existing price patterns. Our philosophy in forecasting future performance of any stock is to look not only at its past charts but also at the business as a whole, including all fundamental and technical indicators. To evaluate if O2Micro International expected return of 1.67 will be sustainable into the future, we have found twenty-seven different technical indicators, which can help you to check if the expected returns are sustainable. Use O2Micro International maximum drawdown, as well as the relationship between the expected short fall and rate of daily change to analyze future returns on O2Micro International.
Volatility is a rate at which the price of O2Micro International or any other equity instrument increases or decreases for a given set of returns. It is measured by calculating the standard deviation of the annualized returns over a given period of time and shows the range to which the price of O2Micro International may increase or decrease. In other words, similar to O2Micro's beta indicator, it measures the risk of O2Micro International and helps estimate the fluctuations that may happen in a short period of time. So if prices of O2Micro International fluctuate rapidly in a short time span, it is termed to have high volatility, and if it swings slowly in a more extended period, it is understood to have low volatility. Please read more on our technical analysis page.

How important is O2Micro International's Liquidity

O2Micro International financial leverage refers to using borrowed capital as a funding source to finance O2Micro International Limited ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. O2Micro International 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 O2Micro International's total debt and its cash.

How O2Micro utilizes its cash?

To perform a cash flow analysis of O2Micro International, investors first need to understand how to read the cash flow statement. A cash flow statement shows the amount of cash O2Micro International is receiving and how much cash it distributes out in a given period. The O2Micro International cash flow statement breaks down these inflows and outflows into different buckets, including operating activities, investing activities, and financing activities. O2Micro International 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 928,974

O2Micro International Volatility Drivers

O2Micro International unsystematic risk is unique to O2Micro International and usually not directly affected by the market or economic environment. An example of unsystematic risk is the possibility of poor earnings or a layoff due to coronavirus. One may mitigate nonsystematic risk by buying different securities in the same industry or by buying in different sectors. For example, if you have a position in O2Micro International you can also buy DSP Group. You can also mitigate this risk by investing in the semiconductors sector as well as in companies having nothing to do with it. This type of risk is also called diversifiable risk and can be understood from analyzing O2Micro International important indicators over time. Here we run a correlation analysis between relevant fundamental ratios over at least ten year period to find a relationship in the way they react to changes in O2Micro International income statement and balance sheet. Here are more details about O2Micro volatility.
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Is O2Micro International valued accurately by the market?

The company reported the previous year's revenue of 63.75 M. Net Loss for the year was (2.73 M) with profit before overhead, payroll, taxes, and interest of 31.97 M.

Are O2Micro International technical ratios showing a turnaround?

New kurtosis is at 3.19. O2Micro International Limited shows above-average downside volatility for the selected time horizon. We advise investors to inspect O2Micro International Limited further and ensure that all market timing and asset allocation strategies are consistent with the estimation of O2Micro International future alpha.

Our Takeaway on O2Micro International Investment

While many other companies under the semiconductors industry are still a bit expensive, O2Micro International may offer a potential longer-term growth to stakeholders. Taking everything into account, as of the 1st of August 2020, our research shows that O2Micro International is a rather risky investment opportunity with a very small probability of distress in the next two years. From a slightly different view, the entity currently appears to be undervalued. Our current 30 days 'Buy-vs-Sell' recommendation on the company is Cautious Hold.

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 Vlad Skutelnik do not own shares of O2Micro International Limited. Please refer to our Terms of Use for any information regarding our disclosure principles.

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