Should you short your Impinj (USA Stocks:PI) and O2Micro International (USA Stocks:OIIM) positions after a hike?

OIIM Stock  USD 4.67  0.02  0.43%   
As many investors are getting excited about semiconductors & semiconductor equipment space, O2Micro International and Impinj may be going in opposite directions. We are going to summarize some of the competitive aspects of both O2Micro and Impinj.
Published over a week ago
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By analyzing existing forward indicators between O2Micro International and Impinj, 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 Impinj with a short position in O2Micro International. 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. O2Micro International has an asset utilization ratio of 85.43 percent. This denotes that the company is making $0.85 for each dollar of assets. An increasing asset utilization means that O2Micro International Limited is more efficient with each dollar of assets it utilizes for everyday operations.

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 does O2Micro utilize 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.

Breaking down the case for O2Micro International

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 O2Micro International revenue. Based on the latest financial disclosure, O2Micro International Limited reported 101.1 M of revenue. This is 97.52% lower than that of the Semiconductors & Semiconductor Equipment sector and 98.16% lower than that of the Information Technology industry. The revenue for all United States stocks is 98.93% higher than that of O2Micro International. As for Impinj we see revenue of 190.28 M, which is 96.53% lower than that of the Information Technology

Sector
4.1 B
OIIM101.1 Million2.31
Sector4.08 Billion93.33
PI190.28 Million4.36

Our perspective of the new O2Micro International hike

The variance is down to 0.94 as of today. O2Micro International Limited has low volatility with Treynor Ratio of 1.6, Maximum Drawdown of 4.11 and kurtosis of 3.13. However, we advice all investors to further analyze O2Micro International Limited to make certain all market information is desiminated and is consistent with the current expectations about O2Micro International upside potential. Understanding different market volatility trends often help investors to time the market. Properly using volatility indicators enable traders to measure O2Micro International's stock risk against market volatility during both bullish and bearish trends. The higher level of volatility that comes with bear markets can directly impact O2Micro International's stock price while adding stress to investors as they watch their shares' value plummet. This usually forces investors to rebalance their portfolios by buying different stocks as prices fall.

Our Takeaway on O2Micro International Investment

While some other entities under the semiconductors industry are still a bit expensive, O2Micro International may offer a potential longer-term growth to stakeholders. While some stakeholders may not share our view we believe that the current risk-reward utility is not appealing enough to do any trading. 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 O2Micro International.

Editorial Staff

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 Aina Ster 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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