SuperCom Story

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SPCB -- USA Stock  

USD 0.77  0.05  6.94%

SuperCom is scheduled to announce its earnings today. As many investors are getting excited about industrials space, it is fair to go over SuperCom as an investment option. We will analyze if it could be a much better year for SuperCom shareholders. Here we also measure the ability of SuperCom to meet its long-term debt obligations, such as interest payments on debt, the final principal payment on the debt, and any other fixed obligations like lease payments.
Published over a month ago
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Should I hold on to my SuperCom (NASDAQ:SPCB) position?
SuperCom currently holds 15.18 M in liabilities with Debt to Equity (D/E) ratio of 0.77, which is about average as compared to similar companies. The entity has a current ratio of 2.36, suggesting that it is liquid enough and is able to pay its financial obligations when due.
SuperCom financial leverage ratio helps determine the effect of debt on the overall profitability of the company. It measures the total debt position of SuperCom, including all of SuperCom'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 SuperCom assets, the company is considered highly leveraged. Understanding the composition and structure of overall SuperCom 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.

Watch out for price decline

Please consider monitoring SuperCom on a daily bases if you are holding a position in it. SuperCom is trading at a penny-stock level, and the possibility of delisting is much higher compared to other equities. However, just because the stock is trading under one dollar, does not mean it will be marked for deletion. Most exchanges require public instruments, such as SuperCom stock to be traded above the $1 level to remain listed. If SuperCom stock price falls below $1 for 30 consecutive trading days, the exchange can delist it. Once the company reaches this point, they will be sent an initial price violation notice directly from an exchange.

How important is SuperCom's Liquidity

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

How SuperCom utilizes its cash?

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

A Deeper Perspective

The current price rise of SuperCom created some momentum for investors as it was traded today as low as 1.1 and as high as 1.17 per share. The company executives may have good odds in positioning the company resources to exploit market volatility in September. The stock standard deviation of daily returns for 30 days investing horizon is currently 13.17. The very high volatility is mostly attributed to the latest market swings and not very good earnings reports from some of the SuperCom partners.

Is SuperCom showing appearance of lower volatility?

Current total risk alpha is at -0.91. SuperCom is displaying above-average volatility over the selected time horizon. Investors should scrutinize SuperCom independently to ensure intended market timing strategies are aligned with expectations about SuperCom volatility. SuperCom is a potential penny stock. Although SuperCom may be in fact a good instrument to invest, many penny stocks are speculative in nature and are subject to artificial price hype. Please make sure you totally understand the upside potential and downside risk of investing in SuperCom. We encourage investors to look for the signals such us email spams, message board hypes, claims of breakthroughs, volume upswings, sudden news releases, promotions that are not reported, or demotions released before SEC filings. Please also check biographies and work history of current and past company officers before investing in high volatility instruments, penny stocks, or equities with microcap classification. You can indeed make money on this equity instrument if you perfectly time your entry and exit. However, remember that penny stocks that have been the subject of an artificial hype usually unable to maintain its increased share price for more than just a few days. The price of a promoted high volatility instrument will almost always revert back. The only way to increase shareholder value is through legitimate performance backed up by solid fundamentals.

The Current Takeaway on SuperCom Investment

Whereas some firms in the security & protection services industry are either recovering or due for a correction, SuperCom may not be performing as strong as the other in terms of long-term growth potentials. The inconsistency in the assessment between current SuperCom valuation and our trade advice on SuperCom is due to the recent market swings and your selection of investing horizon. 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 SuperCom.

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 Ellen Johnson do not own shares of SuperCom. Please refer to our Terms of Use for any information regarding our disclosure principles.

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