Photronics Story

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PLAB -- USA Stock  

USD 11.92  0.21  1.73%

It looks like IPG Photonics will be up for a correction faster as its share price went up 3.61% today to Photronics's 15.9%As many rational traders are trying to avoid technology space, it makes sense to go over Photronics a little further and understand how it stands against IPG Photonics and other similar entities. We are going to analyze some of the competitive aspects of both Photronics and IPG Photonics.
Published over a month ago
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Will Photronics (NASDAQ:PLAB) shadow IPG Photonics price boost?
By analyzing existing basic indicators between Photronics and IPG Photonics, 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 IPG Photonics with a short position in Photronics. 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. Photronics has an asset utilization ratio of 61.64 percent. This suggests that the company is making $0.62 for each dollar of assets. An increasing asset utilization means that Photronics 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 Photronics or IPG Photonics is a better fit for your portfolio, analyzing a few basic fundamental indicators is a good first step.

How important is Photronics's Liquidity

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

Correlation Between Photronics and IPG Photonics

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 Photronics together with similar or unrelated positions with a negative correlation. For example, you can also add IPG Photonics to your portfolio. If IPG Photonics is not perfectly correlated to Photronics 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 Photronics 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 PLAB and IPGP for more information.

Note

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

Exercise or conversion by Lee Kang Jyh of 12000 shares of Photronics subject to Rule 16b-3

Legal trades by Photronics 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:
Photronics insider trading alert for exercise of non-qualified stock options by Lee Kang Jyh, President Asia IC Photomask, on 21st of January 2021. This event was filed by Photronics Inc with SEC on 2021-01-21. Statement of changes in beneficial ownership - SEC Form 4 [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 Perspective

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 take a look at Photronics revenue. Based on the latest financial disclosure, Photronics reported 616.66 M of revenue. This is 84.87% lower than that of the Technology sector and 72.47% lower than that of the Semiconductor Equipment & Materials industry. The revenue for all United States stocks is 93.46% higher than that of Photronics. As for IPG Photonics we see revenue of 1.17 B, which is 47.77% lower than that of the Semiconductor Equipment & Materials

Photronics616.66 Million
Sector2.24 Billion
IPG Photonics1.17 Billion
616.7 M
Photronics
2.2 B
Sector
1.2 B
IPG Photonics

Photronics to recuperate in January

Photronics current variance builds up over 4.35. Photronics currently demonstrates below-verage downside deviation. It has Information Ratio of 0.21 and Jensen Alpha of 0.43. However, we do advice investors to further question Photronics expected returns to ensure all indicators are consistent with the current outlook about its relatively low value at risk.

Our Final Perspective on Photronics

Whereas some other firms under the semiconductor equipment & materials industry are still a bit expensive, Photronics may offer a potential longer-term growth to investors. With an optimistic outlook on your 30 days horizon, it may be a good time to buy new shares of Photronics or increase your existing holdings in the Stock as it seems the potential growth has not yet been fully factored into the current price. 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 Photronics.

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 Gabriel Shpitalnik do not own shares of Photronics. Please refer to our Terms of Use for any information regarding our disclosure principles.

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