Signet Jewelers has 1.45
B in debt with debt to equity (D/E) ratio of 0.66, which is OK given its current industry classification.
The entity has a beta of 1.8737, which indicates a somewhat significant risk relative to the market. Let's try to break down what Signet's beta means in this case. As the market goes up, the company is expected to outperform it. However, if the market returns are negative, Signet Jewelers will likely underperform. Although it is extremely important to respect
Signet Jewelers current price movements, it is better to be realistic regarding the information on equity historical returns. The philosophy towards measuring
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 inspecting
Signet Jewelers technical indicators, you can presently evaluate if the expected return of 0.0022% will be sustainable into the future.
Signet Jewelers right now has a risk of 4.22%. Please validate Signet Jewelers
information ratio, as well as the
relationship between the value at risk and
expected short fall to decide if Signet Jewelers will be following its existing
price patterns.
Signet Jewelers financial leverage ratio helps determine the effect of debt on the overall profitability of the company. It measures the total debt position of Signet Jewelers, including all of Signet Jewelers's outstanding debt obligations, and compares it with the equity. In simple terms, the high financial leverage means the cost of production, together with running the business day-to-day, is high, whereas, lower financial leverage implies lower fixed cost investment in the business and generally considered by investors to be a good sign. So if creditors own a majority of Signet Jewelers assets, the company is considered highly leveraged. Understanding the
composition and structure of overall Signet Jewelers debt and outstanding corporate bonds gives a good idea of
how risky the capital structure of a business is and if it is worth investing in it. Please read more on our
technical analysis page.
Understanding Signet Total Liabilities
Signet Jewelers liabilities are broken down into two parts on the balance sheet. These are short-term (or current) obligations and long-term debt. Signet Jewelers has to fulfill its short-term liabilities in this reporting year and should be no more than 12 months old. Long-term debt, on the other hand, is anything beyond the 12-month payment timeframe. Common short-term liabilities found on Signet Jewelers balance sheet include debt obligations and money owed to different Signet Jewelers vendors, workers, and loan providers. Below is the chart of Signet short long-term liabilities accounts currently reported on its balance sheet.
You can use Signet Jewelers
financial leverage analysis tool to get a better grip on understanding its financial position
How important is Signet Jewelers's Liquidity
Signet Jewelers
financial leverage refers to using borrowed capital as a funding source to finance Signet Jewelers ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. Signet Jewelers 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. Financial leverage can amplify the potential profits to Signet Jewelers' owners, but it also increases the potential losses and risk of financial distress, including bankruptcy, if the firm cannot cover its debt costs. The degree of Signet Jewelers' financial leverage can be measured in several ways, including by ratios such as the debt-to-equity ratio (total debt / total equity), equity multiplier (total assets / total equity), or the debt ratio (total debt / total assets). Please check the
breakdown between Signet Jewelers's total debt and its cash.
Breaking down the case for Signet Jewelers
The entity reported the last year's revenue of 7.83
B. Total Income to common stockholders was 735.4
M with profit before taxes, overhead, and interest of 3.09
B.
Another 3 percent surge for Signet Jewelers
Latest Treynor Ratio is up to 0.05. Price may dip again.
As of the 9th of June, Signet Jewelers has the Semi Deviation of 3.9,
coefficient of variation of 4339.91, and Risk Adjusted Performance of 0.0366. In relation to
fundamental indicators, the
technical analysis model makes it possible for you to check existing technical drivers of Signet Jewelers, as well as the relationship between them. In other words, you can use this information to find out if the company will indeed mirror its model of past prices and volume data, or the prices will eventually revert. We were able to collect and analyze data for nineteen
technical drivers for Signet Jewelers, which can be compared to its competition. Please validate
Signet Jewelers information ratio, as well as the
relationship between the value at risk and
expected short fall to decide if Signet Jewelers is priced more or less accurately, providing market reflects its prevalent price of 63.45 per share. Given that Signet Jewelers has
jensen alpha of 0.0815, we advise you to double-check Signet Jewelers's current market performance to make sure the company can sustain itself at a future point.
Our Final Takeaway
Although other entities under the luxury goods industry are still a bit expensive, Signet Jewelers may offer a potential longer-term growth to shareholders. On the whole, as of the 9th of June 2022, we believe Signet Jewelers is currently
undervalued. It actively responds to the market and projects
below average probability of distress in the next two years. Our final 90 days buy-hold-sell advice on the firm is
Cautious Hold.
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Gabriel Shpitalnik is a Member of Macroaxis Editorial Board. Gabriel is a young entrepreneur and writes predominantly on the business, technology, and finance sector. He likes to analyze different equity instruments across a wide range of industries focusing primarily on consumer products and evolving technologies.
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 Gabriel Shpitalnik do not own shares of Signet Jewelers. Please refer to our
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