Will Sensata (USA Stocks:ST) shadow Wrap Technologies price appreciation?

By examining the fundamental indicators between Wrap Technologies and Sensata, we can assess the impact of market volatility on the prices of both companies. This analysis can also help determine if combining these companies in a single portfolio can help diversify market risk. Pair trading strategies can also be employed, such as matching a long position in Sensata with a short position in Wrap Technologies. For more information, please refer to our pair correlation module. Now, let's delve into the assets. The asset utilization indicator measures the revenue generated for every dollar of assets a company currently holds. Wrap Technologies has an asset utilization ratio of 26.33 percent, which implies that the company generates $0.26 for each dollar of assets. An increasing asset utilization ratio indicates that Wrap Technologies is becoming more efficient in using each dollar of assets for its daily operations.

Main Points

Wrap Technologies, a key player in the Scientific & Technical Instruments industry, presents a compelling investment case with a few key data points to consider. Firstly, the company has a healthy cash position with a total of 19.3M in cash and short-term investments. This solid liquidity position gives the company the financial flexibility to pursue growth opportunities and weather any potential downturns. Additionally, the company's fiscal year-end cash flow was 4.9M, demonstrating its ability to generate positive cash flow, which is a vital sign of financial health. However, the company's free cash flow stands at a loss of 15M, which could be a concern for potential investors. Despite this, the stock has shown a significant price percent change of 33.19, indicating a strong upward momentum in its stock price. Furthermore, the company's market capitalization of 130.1M underscores its standing in the market. The Coefficient of Variation at 747.31, however, suggests a high level of risk, which could deter some investors. Lastly, the company's Sortino Ratio, a measure used to evaluate the risk-adjusted return of an investment, stands at 0.2463. While this is relatively low, it indicates that the company has been somewhat efficient in managing the downside risk. Overall, while Wrap Technologies presents some risks, its strong cash position and market capitalization, along with its positive price momentum, make it a stock worth considering for investors who are comfortable with higher levels of risk.
Published over six months ago
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Reviewed by Michael Smolkin

In the high-stakes game of technology investing, Wrap Technologies (WRTC) and Sensata Technologies (ST) are two contenders vying for investor attention. With a market capitalization of $130.1M, Wrap Technologies, a player in the Electronic Equipment, Instruments & Components sector, has been on a roller coaster ride. As of November 5, 2023, the company reported a cash position of $5.3M and quarterly revenue growth of 0.032. However, it's not all rosy as the firm posted a loss with a profit margin of -2.28. On the other hand, we have Sensata Technologies, a well-established name in the same industry. The question is, can Wrap Technologies outpace Sensata in terms of stock price appreciation? Let's delve deeper. It appears that Sensata Technologies is on a faster recovery path as its share price surged by 2.30% today, compared to Wrap Technologies' 33.19%. While some of us are enthusiastic about the electronic equipment, instruments, and components sector, we will assess the stability of the fundamentals of both Wrap Technologies and Sensata Technologies. We will discuss some of the competitive aspects of both Wrap and Sensata.
Out of tens of thousands of stocks, funds, and ETFs that trade on global exchanges each represent an individual company which you can analyze using comparative analysis. To determine which one of the two entities, such as Wrap or Red is a better fit for your portfolio, analyzing a few basic fundamental indicators is a good first step.

How important is Wrap Technologies's Liquidity

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

Correlation Between Wrap and Red Cat Holdings

In general, Stock analysis is a method for investors and traders to make individual buying and selling decisions. Stock correlation analysis is also essential because it can help investors realize that they may not be as diversified as they think. Risk management strategies are usually required to make sure all portfolios are properly aligned against their risk tolerance level. You can consider holding Wrap Technologies together with similar or unrelated positions with a negative correlation. For example, you can also add Red Cat to your portfolio. If Red Cat is not perfectly correlated to Wrap Technologies it will diversify some of the market risks out of the positively correlated stocks in your portfolio. However, the disadvantage of this sort of hedging is that it can potentially affect your investment returns throughout market cycles. When Wrap Technologies, for example, performs excellent and delivers stable returns, the negatively correlated position you locked in as a hedge may drag your returns down.
Are you currently holding both Wrap Technologies and Red Cat in your portfolio? Please note if you are using this as a pair-trade strategy between Wrap Technologies and Red Cat, watch out for correlation discrepancy over time. Relying on the historical price correlations and assuming that it will not change may lead to short-term losses. Please check pair correlation details between WRAP and RCAT for more information.

Breaking down Wrap Technologies Indicators

Revenue is income that a firm generates from business activities such us rendering services or selling goods to customers. It is a crucial part of a business and an essential item when evaluating a company's financial statements. Revenues from a firm's primary business operations can be reported on the income statement as sales revenue, net sales, or simply sales, depending on the industry in which a given company operates.
Revenue is typically recorded when cash or cash equivalents are exchanged for services or goods and can include product or services discounts, promotions, as well as early payments on invoices or services rendered in advance.

Revenue Breakdown

Let me now go over Wrap Technologies revenue. Based on the latest financial disclosure, Wrap Technologies reported 8.05 M of revenue. This is 99.8% lower than that of the Electronic Equipment, Instruments & Components sector and 99.32% lower than that of the Information Technology industry.
The revenue for all United States stocks is 99.91% higher than that of the firm. As for Sensata Technologies we see revenue of 4.03 B, which is 238.58% higher than that of the Information Technology
1.2 B
WRAP8.05 Million0.15
Sector1.19 Billion22.77
ST4.03 Billion77.08
As Warren Buffet once said, price is what you pay, value is what you get. In the case of Sensata and Wrap Technologies, this adage rings particularly true. Despite Wrap Technologies' impressive current ratio of 12.76X and a market capitalization of 130.09M, the company's financial health is marred by a high probability of bankruptcy at 49.17% and a negative EBITDA of 14.9M, indicating significant losses. Sensata, on the other hand, has shown robust performance with a beta of 1.83, suggesting a higher potential for stock price appreciation. However, investors should also consider Wrap Technologies' potential upside of 15.45 and the fact that 33.87% of its shares are owned by insiders, which could indicate confidence in the company's future. While both companies have their strengths, Sensata's lower risk profile may make it the more attractive investment for those seeking steady stock price appreciation. .

Our take on today Wrap Technologies spike

Wrap Technologies has been creating a stir in the financial market, with the latest semi-deviation surging over 3.6. This spike signifies a significant increase in the company's risk-adjusted performance. Investors should pay attention to this shift as it indicates that the stock's returns are diverging from their anticipated value. While this surge could potentially signal higher returns, it also suggests a higher risk. Therefore, investors should approach Wrap Technologies with a balanced perspective, recognizing the potential for both high returns and substantial volatility. Wrap Technologies is exhibiting above-average volatility over the chosen time horizon. Investors should examine Wrap Technologies independently to ensure that their intended market timing strategies align with their expectations about the company's volatility. Understanding different market volatility trends can often assist investors in timing the market. Proper use of volatility indicators allows traders to gauge Wrap Technologies' stock risk against market volatility during both bullish and bearish trends.
The heightened level of volatility that accompanies bear markets can directly affect Wrap Technologies' stock price, adding stress for investors as they watch the value of their shares plummet. This typically compels investors to rebalance their portfolios by purchasing different stocks as prices drop. In conclusion, Wrap Technologies (USA Stocks: WRAP) presents a mixed picture for potential investors. The company's valuation hype value stands at 3.05, which suggests a level of over-enthusiasm in the market. However, the valuation market value is slightly lower at 3.01, closer to the valuation real value of 2.6. This indicates that the stock may be somewhat overvalued. With the fiscal year end in December, investors have time to monitor the company's performance. The analyst overall consensus is a 'Hold', with one analyst maintaining this position. Therefore, while there may be potential for Wrap Technologies to reverse its course, it would be prudent for investors to proceed with caution. .

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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 Rifka Kats do not own shares of Wrap Technologies. Please refer to our Terms of Use for any information regarding our disclosure principles.

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