United Story

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UTHR -- USA Stock  

USD 100.55  1.74  1.70%

Given the investment horizon of 60 days, United Therapeutics is expected to generate 2.1 times less return on investment than the market. In addition to that, the company is 1.08 times more volatile than its market benchmark. It trades about 0.04 of its total potential returns per unit of risk. The DOW is currently generating roughly 0.08 per unit of volatility. As many old-fashioned traders are trying to avoid healthcare space, it makes sense to sum up United Therapeutics a little further and try to understand its current volatility patterns. We are going to discuss if the current expected returns justify United Therapeutics' volatility.
Published over a month ago
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Is United Therapeutics (NASDAQ:UTHR) low volatility a good sign for retail investors?
United Therapeutics currently holds 800 M in liabilities with Debt to Equity (D/E) ratio of 0.27, which may suggest United Therapeutics is not taking enough advantage from borrowing. The entity has a current ratio of 8.73, suggesting that it is liquid enough and is able to pay its financial obligations when due.
Volatility is a rate at which the price of United Therapeutics or any other equity instrument increases or decreases for a given set of returns. It is measured by calculating the standard deviation of the annualized returns over a given period of time and shows the range to which the price of United Therapeutics may increase or decrease. In other words, similar to United's beta indicator, it measures the risk of United Therapeutics and helps estimate the fluctuations that may happen in a short period of time. So if prices of United Therapeutics fluctuate rapidly in a short time span, it is termed to have high volatility, and if it swings slowly in a more extended period, it is understood to have low volatility. Please read more on our technical analysis page.

How important is United Therapeutics's Liquidity

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

What do experts say?

Stock analysis is a method for investors and traders to make buying and selling decisions. By studying and evaluating past and current data, investors and traders attempt to gain an edge in the markets by making informed decisions. It is good to see analyst projects for United Therapeutics, but it might be worth checking our own buy vs. sell analysis

United Therapeutics Volatility Drivers

United Therapeutics unsystematic risk is unique to United Therapeutics and usually not directly affected by the market or economic environment. An example of unsystematic risk is the possibility of poor earnings or a layoff due to coronavirus. One may mitigate nonsystematic risk by buying different securities in the same industry or by buying in different sectors. For example, if you have a position in United Therapeutics you can also buy Seattle Genetics. You can also mitigate this risk by investing in the biotechnology sector as well as in companies having nothing to do with it. This type of risk is also called diversifiable risk and can be understood from analyzing United Therapeutics important indicators over time. Here we run a correlation analysis between relevant fundamental ratios over at least ten year period to find a relationship in the way they react to changes in United Therapeutics income statement and balance sheet. Here are more details about United volatility.