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Will the latest Westwater Resources volatility spike frighten retail investors?
 | By Raphi Shpitalnik | Macroaxis Story |
It seems Westwater Resources will continue to recover much faster as its share price surged up 49.32% today. The entity's current daily volatility is 9.22 percent, with a beta of 0.87 and an alpha of 0.34 over DOW. As many of us are excited about westwater resources, it is fair to sum up Westwater Resources. We will evaluate why recent Westwater Resources price moves suggest a bounce in November.
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Reviewed by Michael Smolkin
Westwater Resources has about 2.33 M in cash with (11.79 M) of positive cash flow from operations. This results in cash-per-share (CPS) ratio of 0.31. The company has 765 K in debt with debt to equity (D/E) ratio of 0.04, which may show that the company is not taking advantage of profits from borrowing. Westwater Resources has a current ratio of 0.78, suggesting that it has not enough short term capital to pay financial commitments when the payables are due.
Please note, it is not enough to conduct a financial or market analysis of a single entity such as Westwater Resources. Your research has to be compared to or analyzed against Westwater Resources' peers to derive any actionable benefits. When done correctly, Westwater Resources' 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 Westwater Resources.
Investing in Westwater Resources, 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 Westwater Resources 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 Westwater Resources' 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.
Watch out for price decline
Please consider monitoring Westwater Resources on a daily basis if you are holding a position in it. Westwater Resources 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 Westwater Resources stock to be traded above the $1 level to remain listed. If Westwater Resources 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 Westwater Resources's Liquidity
Westwater Resources financial leverage refers to using borrowed capital as a funding source to finance Westwater Resources ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. Westwater Resources 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 Westwater Resources' 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 Westwater Resources' 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 Westwater Resources's total debt and its cash.
Westwater Resources Gross Profit
Westwater Resources Gross Profit growth is one of the most critical measures in evaluating the company. The Gross Profit growth rate is calculated simply by comparing Westwater Resources previous period's values with its current period's values. Each time period you're measuring should be of equal lengths the increase or decrease, in a company's Gross Profit between two periods. Here we show Westwater Resources Gross Profit growth over the last 10 years. Please check Westwater Resources' gross profit and other fundamental indicators for more details.
Westwater Resources Correlation with Peers
Investors in Westwater can reduce exposure to individual asset risk by holding a diversified portfolio of assets in addition to a long position in Westwater Resources. Diversification will allow for the same portfolio return with reduced risk. The correlation table of Westwater Resources and its peers is a two-dimensional matrix that shows the correlation coefficient between pairs of securities Westwater 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 Westwater for more details
Another Outlook On Westwater Resources
Westwater Resources is extremely dangerous given 1 month investment horizon. Westwater Resources shows Sharpe Ratio of 0.12, which attests that the company had 0.12% of return per unit of risk over the last month. Our standpoint towards determining the risk of a stock is to use both market data as well as company specific technical data. We are able to interpolate and break down twenty-eight different technical indicators, which can help you to evaluate if expected returns of 1.13% are justified by taking the suggested risk. Use Westwater Resources Downside Deviation of 5.48, mean deviation of 4.76, and Market Risk Adjusted Performance of 0.4732 to evaluate company specific risk that cannot be diversified away.
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