Is SINGING MACHINE a good short term trade before volatility upsurges?
 | By Raphi Shpitalnik | Macroaxis Story |
Today we will summarize SINGING MACHINE. We will analyze why it could be a much better year for SINGING MACHINE shareholders. Given the investment horizon of 30 days, SINGING MACHINE is expected to generate 37.25 times more return on investment than the market. However, the company is 37.25 times more volatile than its market benchmark. It trades about 0.12 of its potential returns per unit of risk. The market is currently generating roughly 0.1 per unit of risk. The firm moves indifferently to market moves.
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Reviewed by Gabriel Shpitalnik
The company conducts business under Technology sector and is part of Consumer Electronics industry. SINGING MACHINE INC currently holds 1.9 M in liabilities with Debt to Equity (D/E) ratio of 0.25, which may suggest the firm is not taking enough advantage from borrowing. The entity has a current ratio of 1.31, which is within standard range for the sector.
How important is Singing Machine's Liquidity
Singing Machine financial leverage refers to using borrowed capital as a funding source to finance Singing Machine ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. Singing Machine 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 Singing Machine's 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 Singing Machine's 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 Singing Machine's total debt and its cash.
Singing Machine Correlation with Peers
Investors in Singing can reduce exposure to individual asset risk by holding a diversified portfolio of assets in addition to a long position in Singing Machine. Diversification will allow for the same portfolio return with reduced risk. The correlation table of Singing Machine and its peers is a two-dimensional matrix that shows the correlation coefficient between pairs of securities Singing 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 Singing for more details
Is Singing Machine valued appropriately by the market?
SINGING MACHINE maintains current valuation of 5.78 m. SINGING MACHINE is out of control given 1 month investment horizon. SINGING MACHINE INC owns Efficiency Ratio (i.e. Sharpe Ratio) of 0.12, which indicates the firm had 0.12% of return per unit of standard deviation over the last month. Our approach into measuring the volatility of a stock is to use SINGING MACHINE INC market data together with company specific technical indicators. We were able to collect and analyze data for twenty-one different technical indicators, which can help you to evaluate if expected returns of 7.88% are justified by taking the suggested risk. Use SINGING MACHINE INC coefficient of variation of 862.85, and risk adjusted performance of 0.2197 to evaluate company specific risk that cannot be diversified away.
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