SOHO China Return On Equity vs. Operating Margin
Based on the key profitability measurements obtained from SOHO China's financial statements, SOHO China Limited may not be well positioned to generate adequate gross income at this time. It has a very high probability of underperforming in July. Profitability indicators assess SOHO China's ability to earn profits and add value for shareholders.
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Please note, there is a significant difference between SOHO China's value and its price as these two are different measures arrived at by different means. Investors typically determine if SOHO China is a good investment by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, SOHO China's price is the amount at which it trades on the open market and represents the number that a seller and buyer find agreeable to each party.
For SOHO China profitability analysis, we use financial ratios and fundamental drivers that measure the ability of SOHO China to generate income relative to revenue, assets, operating costs, and current equity. These fundamental indicators attest to how well SOHO China Limited utilizes its assets to generate profit and value for its shareholders. The profitability module also shows relationships between SOHO China's most relevant fundamental drivers. It provides multiple suggestions of what could affect the performance of SOHO China Limited over time as well as its relative position and ranking within its peers.
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SOHO China Limited Operating Margin vs. Return On Equity Fundamental Analysis
Comparative valuation techniques use various fundamental indicators to help in determining SOHO China's current stock value. Our valuation model uses many indicators to compare SOHO China value to that of its competitors to determine the firm's financial worth. SOHO China Limited is rated below average in return on equity category among its peers. It is currently regarded as top stock in operating margin category among its peers reporting about 171.15 of Operating Margin per Return On Equity. The reason why the comparable model can be used in almost all circumstances is due to the vast number of multiples that can be utilized, such as the price-to-earnings (P/E), price-to-book (P/B), price-to-sales (P/S), price-to-cash flow (P/CF), and many others. The P/E ratio is the most commonly used of these ratios because it focuses on the SOHO China's earnings, one of the primary drivers of an investment's value.SOHO Operating Margin vs. Return On Equity
Return on Equity or ROE tells company stockholders how effectually their money is being utilized or reinvested. It is a useful ratio when analyzing company profitability or the management effectiveness given the capital invested by the shareholders. ROE shows how efficiently a company utilizes investments to generate income.
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| = | 0.0039 |
For most industries, Return on Equity between 10% and 30% are considered desirable to provide dividends to owners and have funds for the future growth of the company. Investors should be very careful using ROE as the only efficiency indicator because ROE can be high if a company is heavily leveraged.
Operating Margin shows how much operating income a company makes on each dollar of sales. It is one of the profitability indicators which helps analysts to understand whether the firm is successful or not making money from everyday operations.
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| = | 0.67 % |
A good Operating Margin is required for a company to be able to pay for its fixed costs or payout its debt, which implies that the higher the margin, the better. This ratio is most effective in evaluating the earning potential of a company over time when comparing it against a firm's competitors.
SOHO Operating Margin Comparison
SOHO China is currently under evaluation in operating margin category among its peers.
SOHO China Profitability Projections
The most important aspect of a successful company is its ability to generate a profit. For investors in SOHO China, profitability is also one of the essential criteria for including it into their portfolios because, without profit, SOHO China will eventually generate negative long term returns. The profitability progress is the general direction of SOHO China's change in net profit over the period of time. It can combine multiple indicators of SOHO China, where stable trends show no significant progress. An accelerating trend is seen as positive, while a decreasing one is unfavorable. A rising trend means that profits are rising, and operational efficiency may be rising as well. A decreasing trend is a sign of poor performance and may indicate upcoming losses.
SOHO China Limited, together with its subsidiaries, engages in the real estate development, and property leasing and management activities in Peoples Republic of China. SOHO China Limited was founded in 1995 and is headquartered in Beijing, China. Soho China operates under Real Estate Services classification in the United States and is traded on OTC Exchange. It employs 1700 people.
SOHO Profitability Driver Comparison
Profitability drivers are factors that can directly affect your investment outlook on SOHO China. Investors often realize that things won't turn out the way they predict. There are maybe way too many unforeseen events and contingencies during the holding period of SOHO China position where the market behavior may be hard to predict, tax policy changes, gold or oil price hikes, calamities change, and many others. The question is, are you prepared for these unexpected events? Although some of these situations are obviously beyond your control, you can still follow the important profit indicators to know where you should focus on when things like this occur. Below are some of the SOHO China's important profitability drivers and their relationship over time.
Use SOHO China in pair-trading
One of the main advantages of trading using pair correlations is that every trade hedges away some risk. Because there are two separate transactions required, even if SOHO China position performs unexpectedly, the other equity can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in SOHO China will appreciate offsetting losses from the drop in the long position's value.SOHO China Pair Trading
SOHO China Limited Pair Trading Analysis
The ability to find closely correlated positions to SOHO China could be a great tool in your tax-loss harvesting strategies, allowing investors a quick way to find a similar-enough asset to replace SOHO China when you sell it. If you don't do this, your portfolio allocation will be skewed against your target asset allocation. So, investors can't just sell and buy back SOHO China - that would be a violation of the tax code under the "wash sale" rule, and this is why you need to find a similar enough asset and use the proceeds from selling SOHO China Limited to buy it.
The correlation of SOHO China is a statistical measure of how it moves in relation to other instruments. This measure is expressed in what is known as the correlation coefficient, which ranges between -1 and +1. A perfect positive correlation (i.e., a correlation coefficient of +1) implies that as SOHO China moves, either up or down, the other security will move in the same direction. Alternatively, perfect negative correlation means that if SOHO China Limited moves in either direction, the perfectly negatively correlated security will move in the opposite direction. If the correlation is 0, the equities are not correlated; they are entirely random. A correlation greater than 0.8 is generally described as strong, whereas a correlation less than 0.5 is generally considered weak.
Correlation analysis and pair trading evaluation for SOHO China can also be used as hedging techniques within a particular sector or industry or even over random equities to generate a better risk-adjusted return on your portfolios.Use Investing Themes to Complement your SOHO China position
In addition to having SOHO China in your portfolios, you can quickly add positions using our predefined set of ideas and optimize them against your very unique investing style. A single investing idea is a collection of funds, stocks, ETFs, or cryptocurrencies that are programmatically selected from a pull of investment themes. After you determine your investment opportunity, you can then find an optimal portfolio that will maximize potential returns on the chosen idea or minimize its exposure to market volatility.Did You Try This Idea?
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Other Information on Investing in SOHO Pink Sheet
To fully project SOHO China's future profitability, investors should examine all historical financial statements. These statements provide investors with a comprehensive snapshot of the financial position of SOHO China Limited at a specified time, usually calculated after every quarter, six months, or one year. Three primary documents fall into the category of financial statements. These documents include SOHO China's income statement, its balance sheet, and the statement of cash flows.