The company conducts business under
Industrials sector and is part of
Security & Protection Services industry.
We provide advice to complement the current
expert consensus on Supercom. Our dynamic recommendation engine harnesses a multidimensional algorithm to analyze the firm's potential to grow using all technical and fundamental data available at the time.
Investing in Supercom, just like investing in any other equity instrument, is characterized by a strong risk-return correlation. High risks mean high returns and low risk means lower expected returns. Risk management is the act of identifying and assessing the potential risk and developing strategies to minimize these risks and earn maximum possible profits while holding Supercom along with other instruments in the same portfolio. Using conventional
technical analysis and
fundamental analysis to select individual securities into a portfolio complements risk management and adds value to overall investors' investing strategies.
Sophisticated investors, who have witnessed
many market ups and downs, anticipate that the market will even out over time. This tendency of Supercom's price to converge to an average value over time is called mean reversion. However, historically, high market prices usually discourage investors that believe in mean reversion to invest, while low prices are viewed as an opportunity to buy.
Please note, it is not enough to conduct a financial or market analysis of a single entity such as Supercom. Your research has to be compared to or analyzed against Supercom's peers to derive any actionable benefits. When done correctly, Supercom's competitive analysis will give you plenty of quantitative and qualitative data to validate your investment decisions or develop an entirely new strategy toward taking a position in Supercom.
Watch out for price decline
Please consider monitoring Supercom on a daily basis 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 stocks. 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. Financial leverage can amplify the potential profits to Supercom'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 Supercom'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 Supercom's total debt and its cash.
Supercom Correlation with Peers
Investors in Supercom can reduce exposure to individual asset risk by holding a diversified portfolio of assets in addition to a long position in Supercom. Diversification will allow for the same portfolio return with reduced risk. The correlation table of Supercom and its peers is a two-dimensional matrix that shows the correlation coefficient between pairs of securities Supercom is related in some way. The cells in the table are color-coded to highlight significantly positive and negative relationships. Each cell shows the correlation between one pair of equities and can be used to run pair trading strategies or create efficient portfolios with
your current brokerage. Please check
volatility of Supercom for more details
Is Supercom valued fairly by the market?
Supercom is dangerous given 1 month investment horizon.
Supercom owns Efficiency Ratio (i.e. Sharpe Ratio) of 0.15, which indicates the firm had 0.15% of return per unit of risk over the last month. Our standpoint towards measuring the risk of a stock is to use both market data as well as company specific technical data. We were able to break down twenty-one different
technical indicators, which can help you to evaluate if expected returns of 1.71% are justified by taking the suggested risk. Use Supercom Semi Deviation of 5.79,
risk adjusted performance of 0.1342, and Coefficient Of Variation of 661.71 to evaluate company specific risk that cannot be
diversified away.
Another 3 percent rise for Supercom
Current expected short fall is at -8.79.
As of the 19th of March, Supercom has the Risk Adjusted Performance of 0.1342,
coefficient of variation of 661.71, and Semi Deviation of 5.79. In relation to
fundamental indicators, the
technical analysis model makes it possible for you to check existing technical drivers of Supercom, 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 break down nineteen
technical drivers for Supercom, which can be compared to its competition. Please validate
Supercom treynor ratio, as well as the
relationship between the potential upside and
expected short fall to decide if Supercom is priced more or less accurately, providing market reflects its prevalent price of 2.24 per share. Please also confirm Supercom
total risk alpha, which is currently at
(0.046459) to double-check the company can sustain itself at a future point.
Our Bottom Line On Supercom
Whereas other companies within the security & protection services industry are still a little expensive, even after the recent corrections, Supercom may offer a potential longer-term growth to investors. To sum up, as of the 19th of March 2021, we believe that at this point, Supercom is
undervalued with
below average probability of bankruptcy within the next 2 years. Our concluding Buy-Hold-Sell recommendation on the company is
Hold.
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Vlad Skutelnik is a Macroaxis Contributor. Vlad covers stocks, funds, cryptocurrencies, and ETFs that are traded in North America, focusing primarily on fundamentals, valuation and market volatility. He has many years of experience in fintech, predictive investment analytics, and risk management.
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 Vlad Skutelnik do not own shares of Supercom. Please refer to our
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