Sunopta Story

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STKL -- USA Stock  

USD 14.77  0.76  4.89%

Sunopta is scheduled to announce its earnings today. While some millenniums are indifferent towards consumer defensive space, it makes sense to summarize Sunopta as a unique investment alternative. Here we also measure the ability of Sunopta 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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Will Sunopta (NASDAQ:STKL) traders stop to short in April?
This firm currently holds 505.36 M in liabilities with Debt to Equity (D/E) ratio of 2.03, implying Sunopta greatly relies on financing operations through barrowing. The company has a current ratio of 1.31, which is within standard range for the sector.
Sunopta financial leverage ratio helps determine the effect of debt on the overall profitability of the company. It measures the total debt position of Sunopta, including all of Sunopta'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 Sunopta assets, the company is considered highly leveraged. Understanding the composition and structure of overall Sunopta 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.

How important is Sunopta's Liquidity

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

How Sunopta utilizes its cash?

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

A Deeper Perspective On Sunopta

The new price hike of Sunopta created some momentum for stakeholders as it was traded today as low as 14.68 and as high as 15.72 per share. The company executives may have good odds in positioning the company resources to exploit market volatility in April. The stock standard deviation of daily returns for 30 days investing horizon is currently 3.13. The above-average risk is mostly attributed to market volatility and speculations regarding some of the upcoming earning calls from Sunopta partners.

Sunopta is expecting lower volatility in April

The expected short fall is down to -2.96 as of today. Sunopta currently demonstrates below-average downside deviation. It has Information Ratio of 0.25 and Jensen Alpha of 0.91. However, we advise investors to further question Sunopta expected returns to ensure all indicators are consistent with the current outlook about its relatively low value at risk. Understanding different market volatility trends often help investors to time the market. Properly using volatility indicators enable traders to measure Sunopta's stock risk against market volatility during both bullying and bearish trends. The higher level of volatility that comes with bear markets can directly impact Sunopta's stock price while adding stress to investors as they watch their shares' value plummet. This usually forces investors to rebalance their portfolios by buying different stocks as prices fall.

Our Final Take On Sunopta

While some other firms within the packaged foods industry are still a little expensive, even after the recent corrections, Sunopta may offer a potential longer-term growth to stakeholders. With an impartial outlook on the current market volatility, it may be better to hold off any inventment activity and neither take up nor exit any shares of Sunopta at this time. The Sunopta risk-reward trade off is not appealing enough to do any trading. 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 Sunopta.

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

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