WidePoint Story

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The essential goal of this article is to break down our current position on WidePoint for investors considering to short it. We will inspect why WidePoint investors may still consider a stake in the business.
Published over two months ago
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Are WidePoint (AMEX:WYY) investors starting to hold back?
WidePoint holds a performance score of 14 on a scale of zero to a hundred. The firm maintains a market beta of -0.136, which attests to not very significant fluctuations relative to the market. Let's try to break down what WidePoint's beta means in this case. As returns on the market increase, returns on owning WidePoint are expected to decrease at a much lower rate. During the bear market, WidePoint is likely to outperform the market. Although it is vital to follow WidePoint historical price patterns, it is good to be conservative about what you can do with the information regarding equity current price history. Our philosophy towards determining future performance of any stock is to look not only at its past charts but also at the business as a whole, including all fundamental and technical indicators. To evaluate if WidePoint expected return of 1.2 will be sustainable into the future, we have found twenty-eight different technical indicators, which can help you to check if the expected returns are sustainable. Use WidePoint information ratio, value at risk, kurtosis, as well as the relationship between the sortino ratio and semi variance to analyze future returns on WidePoint.

How important is WidePoint's Liquidity

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

How WidePoint utilizes its cash?

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

Acquisition by Otto Guenther of 3636 shares of WidePoint subject to Rule 16b-3

Legal trades by WidePoint insiders are very common, as founders, directors, or employees of any publicly traded firm often have stock or stock options. These trades are made public in the United States through the filing of Form 4 of the Securities and Exchange Commission. Below entry was recorded recently and is publicly available as an insider trade:
WidePoint insider trading alert for grant of common stock by Otto Guenther, the corporate stakeholder, on 6th of January 2021. This event was filed by Widepoint Corp with SEC on 2021-01-06. Statement of changes in beneficial ownership - SEC Form 4. Otto Guenther currently serves as executive chairman of the board of WidePoint [view details]   
Note, although insider trading is legal, in the United States, Canada, Australia, and Germany, for mandatory reporting purposes, corporate insiders are defined as a company's officers, directors, and any beneficial owners of more than 10% of a class of the company's equity securities.

Going after WidePoint Financials

The current price rise of WidePoint may raise some interest from investors as it is trading at a share price of 10.48 on 6,659,511 in trading volume. The company executives may have good odds in positioning the company resources to exploit market volatility in December. The stock standard deviation of daily returns for 30 days investing horizon is currently 5.87. The very high volatility is mostly attributed to the latest market swings and not very good earnings reports from some of the WidePoint partners.

WidePoint implied volatility may change after the rise

The mean deviation is down to 3.41 as of today. WidePoint shows above-average downside volatility for the selected time horizon. We advise investors to inspect WidePoint further and ensure that all market timing and asset allocation strategies are consistent with the estimation of WidePoint future alpha.

The Bottom Line

While other companies within the information technology services industry are still a little expensive, even after the recent corrections, WidePoint may offer a potential longer-term growth to investors. With an impartial outlook on the current market volatility, it may be better to hold off any inventment activity and neither buy nor sell any shares of WidePoint at this time. The WidePoint 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 WidePoint.

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 Ellen Johnson do not own shares of WidePoint. Please refer to our Terms of Use for any information regarding our disclosure principles.

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