Should I drop my Sina (NASDAQ:SINA) holdings?

Sina is scheduled to announce its earnings tomorrow. While some of us are becoming more enthusiastic about communication services space, let's go over Sina Corporation in greater detail to make a better estimate of its debt utilization. We will analyze if it could be a much better year for Sina shareholders.
Published over a year ago
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Reviewed by Rifka Kats

The company currently holds 1.88 B in liabilities with Debt to Equity (D/E) ratio of 0.51, which is about average as compared to similar companies. The asset utilization indicator refers to the revenue earned for every dollar of assets a company currently reports. Sina has an asset utilization ratio of 48.14 percent. This suggests that the company is making $0.48 for each dollar of assets. An increasing asset utilization means that Sina Corporation is more efficient with each dollar of assets it utilizes for everyday operations.

How important is SINA's Liquidity

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

Breaking it down a bit more

Sina reported the previous year's revenue of 2.1 B. Net Loss for the year was (97.97 M) with profit before overhead, payroll, taxes, and interest of 1.67 B.

Our take on Sina small slip

The coefficient of variation is down to 1053.68 as of today. Sina Corporation exhibits relatively low volatility with skewness of 2.82 and kurtosis of 16.93. However, we advice investors to further investigate Sina Corporation to ensure all market statistics is disseminated and is consistent with investors' estimations about Sina upside potential.

Our Bottom Line On Sina

Whereas other entities in the internet content & information industry are either recovering or due for a correction, Sina may not be as strong as the others in terms of longer-term growth potentials. With a somewhat neutral outlook on your 30 days horizon, it may be better to hold off any trading activity and neither trade new shares of Sina nor drop your existing holdings in the Stock. It seems the expected volatility 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 Sina.

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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 Raphi Shpitalnik do not own shares of SINA Corporation. Please refer to our Terms of Use for any information regarding our disclosure principles.

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