Novan Stock Buy Hold or Sell Recommendation

NOVN
 Stock
  

USD 1.17  0.01  0.85%   

Given the investment horizon of 90 days and your complete indifference towards market risk, our recommendation regarding Novan Inc is 'Strong Buy'. Macroaxis provides Novan buy-hold-or-sell recommendation only in the context of selected investment horizon and investor attitude towards risk assumed by holding Novan positions. The advice algorithm takes into account all of Novan's available fundamental, technical, and predictive indicators you will find on this site.
  
The advice is provided from Novan's buy-and-hold perspective. Additionally, see Novan Analyst Recommendation to compare Macroaxis Buy or Sell Recommendation with the current analyst consensus. To check ratings for multiple equity instruments, please use the Instant Ratings tool. We conduct extensive research on individual companies such as Novan and provide practical buy, sell, or hold advice based on selected investing horizon and risk tolerance towards Novan Inc.

Execute Novan Buy or Sell Advice

The Novan recommendation should be used to complement the buy-or-sell advice compiled from the current analysts' consensus on Novan Inc. Macroaxis does not own or have any residual interests in Novan Inc or other equities on which the buy-or-sell advice is provided. Please provide your input below to execute Novan's advice using the current market data and latest reported fundamentals.

Time Horizon

Risk Tolerance

Execute Advice
Sell NovanBuy Novan
Strong Buy

Volatility

Details

Hype Condition

Details

Current Valuation

Details

Odds of Distress

Details

Economic Sensitivity

Details

Analyst Consensus

Details

Financial Strenth (F Score)

Details

Financial Leverage

Inapplicable
Details

Reporting Quality (M-Score)

Details
For the selected time horizon Novan Inc has a Risk Adjusted Performance of (0.24), Jensen Alpha of (1.02), Total Risk Alpha of (1.25) and Treynor Ratio of (1.23)
We provide investment recommendation to complement the last-minute expert consensus on Novan Inc. Our dynamic recommendation engine harnesses a multidimensional algorithm to analyze the entity's potential to grow using all technical and fundamental data available at the time. To make sure Novan Inc is not overpriced, please verify all Novan Inc fundamentals, including its beta, current liabilities, as well as the relationship between the book value per share and net income . Given that Novan Inc is a hitting penny stock territory we strongly suggest to closely look at its price to earning.

Novan Trading Alerts and Improvement Suggestions

Novan Inc generated a negative expected return over the last 90 days
Novan Inc has high historical volatility and very poor performance
Novan Inc may become a speculative penny stock
The company currently holds 29.05 M in liabilities with Debt to Equity (D/E) ratio of 4.3, indicating the company may have difficulties to generate enough cash to satisfy its financial obligations. Novan Inc has a current ratio of 0.95, indicating that it has a negative working capital and may not be able to pay financial obligations when due. Debt can assist Novan until it has trouble settling it off, either with new capital or with free cash flow. So, Novan's shareholders could walk away with nothing if the company can't fulfill its legal obligations to repay debt. However, a more frequent occurrence is when companies like Novan Inc sell additional shares at bargain prices, diluting existing shareholders. Debt, in this case, can be an excellent and much better tool for Novan to invest in growth at high rates of return. When we think about Novan's use of debt, we should always consider it together with cash and equity.
The entity reported the previous year's revenue of 2.96 M. Net Loss for the year was (29.69 M) with loss before overhead, payroll, taxes, and interest of (17.71 M).
Novan Inc currently holds about 14.9 M in cash with (24.78 M) of positive cash flow from operations. This results in cash-per-share (CPS) ratio of 0.61.
Novan Inc has a frail financial position based on the latest SEC disclosures

Novan Returns Distribution Density

The distribution of Novan's historical returns is an attempt to chart the uncertainty of Novan's future price movements. The chart of the probability distribution of Novan stock daily returns describes the distribution of returns around its average expected value. We use Novan Inc price's Value At Risk and its Upside Potential as a relative measure of the distribution. The graph of the distribution of Novan returns is essential to provide solid investment advice for Novan.
Mean Return-0.96Value At Risk-8.46
Potential Upside5.95Standard Deviation5.81
   Return Density   
       Distribution  
Investment risk management requires an estimate of the probability of extreme price changes. Therefore, the correct representation of the distribution of Novan historical returns presented in an easy-to-digest graphical form helps investors and money managers understand the risk-reward trade-off of different investement strategies.

Novan Stock Institutional Investors

Have you ever been surprised when a price of an equity instrument such as Novan is soaring high without any particular reason? This is usually happening because many institutional investors are aggressively trading Novan Inc backward and forwards among themselves. Novan's institutional investor refers to the entity that pools money to purchase Novan's securities or originate loans. Institutional investors include commercial and private banks, credit unions, insurance companies, pension funds, hedge funds, endowments, and mutual funds. Operating companies that invest excess capital in these types of assets may also be included in the term and may influence corporate governance by exercising voting rights in their investments.
Security TypeSharesValue
Wells Fargo CompanyCommon Shares1410.0
Wells Fargo CompanyCommon Shares1280.0
Wells Fargo CompanyCommon Shares1160.0
Wells Fargo CompanyCommon Shares1360.0
Wells Fargo CompanyCommon Shares93.01000
Wells Fargo CompanyCommon Shares90.01000
Wells Fargo CompanyCommon Shares8991000
Note, although Novan's institutional investors appear to be way more sophisticated than retail investors, it remains unclear if professional active investment managers can reliably enhance risk-adjusted returns by an amount that exceeds fees and expenses.

Novan Cash Flow Accounts

201720182019202020212022 (projected)
Capital Expenditure(2.14 M)(1.06 M)(422 K)(126 K)(144.9 K)(156.34 K)
Depreciation Amortization and Accretion1.42 M1.66 M2.03 M1.17 M1.35 M1.38 M
Net Cash Flow or Change in Cash and Cash Equivalents(32.09 M)5.67 M5.52 M21.63 M19.47 M21 M
Issuance Purchase of Equity Shares81 K35.69 M816 K52.06 M59.87 M64.6 M
Issuance Repayment of Debt Securities(166 K)(10 K)(11 K)956 K860.4 K751.79 K
Net Cash Flow from Financing(88 K)35.35 M25.82 M52.81 M44.09 M37.98 M
Net Cash Flow from Investing(2.14 M)(1.06 M)(422 K)(126 K)(7.53 M)(7.73 M)
Net Cash Flow from Operations(29.86 M)(28.62 M)(19.88 M)(31.06 M)(24.78 M)(26.73 M)
Share Based Compensation3.76 M2.2 M1.84 M1.31 M1.5 M1.85 M

Novan Greeks

Most traded equities are subject to two types of risk - systematic (i.e., market) and unsystematic (i.e., nonmarket or company-specific) risk. Unsystematic risk is the risk that events specific to Novan or Pharmaceuticals sector will adversely affect the stock's price. This type of risk can be diversified away by owning several different stocks in different industries whose stock prices have shown a small correlation to each other. On the other hand, systematic risk is the risk that Novan's price will be affected by overall stock market movements and cannot be diversified away. So, no matter how many positions you have, you cannot eliminate market risk. However, you can measure a Novan stock's historical response to market movements and buy it if you are comfortable with its volatility direction. Beta and standard deviation are two commonly used measures to help you make the right decision.
α
Alpha over NYSE Composite
-1.02
β
Beta against NYSE Composite0.79
σ
Overall volatility
5.88
Ir
Information ratio -0.18

Novan Volatility Alert

Novan Inc exhibits very low volatility with skewness of -0.49 and kurtosis of 5.41. However, we advise investors to further study Novan Inc technical indicators to ensure that all market info is available and is reliable. Novan Inc is a potential penny stock. Although Novan may be in fact a good instrument to invest, many penny stocks are speculative in nature and are subject to artificial price hype. Please make sure you totally understand the upside potential and downside risk of investing in Novan Inc. We encourage investors to look for signals such as email spams, message board hypes, claims of breakthroughs, volume upswings, sudden news releases, promotions that are not reported, or demotions released before SEC filings. Please also check biographies and work history of current and past company officers before investing in high volatility instruments, penny stocks, or equities with microcap classification. You can indeed make money on Novan instrument if you perfectly time your entry and exit. However, remember that penny stocks that have been the subject of artificial hype usually unable to maintain their increased share price for more than just a few days. The price of a promoted high volatility instrument will almost always revert back. The only way to increase shareholder value is through legitimate performance backed up by solid fundamentals.

Novan Fundamentals Vs Peers

Comparing Novan's fundamentals to the average values of its peers is one of the most widely used and accepted methods of equity analyses. It helps to analyze Novan's direct or indirect competition across all of the common fundamentals between Novan and the related equities. This way, we can detect undervalued stocks with similar characteristics as Novan or determine the stocks which would be an excellent addition to an existing portfolio. Peer analysis of Novan's fundamental indicators could also be used in its relative valuation, which is a method of valuing Novan by comparing valuation metrics with those of similar companies.
    
 Better Than Average     
    
 Worse Than Average Compare Novan to competition
FundamentalsNovanPeer Average
Return On Equity(2.22) %(0.31) %
Return On Asset(0.32) %(0.14) %
Profit Margin(2.64) %(1.27) %
Operating Margin(2.86) %(5.51) %
Current Valuation17.53 M16.62 B
Shares Outstanding24.46 M571.82 M
Shares Owned by Insiders4.49 %10.09 %
Shares Owned by Institutions18.88 %39.21 %
Number of Shares Shorted463.57 K4.71 M
Price to Earning(1.49) X28.72 X
Price to Book4.20 X9.51 X
Price to Sales2.10 X11.42 X
Revenue2.96 M9.43 B
Gross Profit(17.71 M)27.38 B
EBITDA(29.34 M)3.9 B
Net Income(29.69 M)570.98 M
Cash and Equivalents14.9 M2.7 B
Cash per Share0.61 X5.01 X
Total Debt29.05 M5.32 B
Debt to Equity4.30 %48.70 %
Current Ratio0.97 X2.16 X
Book Value Per Share0.28 X1.93 K
Cash Flow from Operations(24.78 M)971.22 M
Short Ratio1.83 X4.00 X
Earnings Per Share(1.89) X3.12 X
Target Price14.5
Number of Employees2918.84 K
Beta0.34-0.15
Market Capitalization29.11 M19.03 B
Total Asset68.96 M29.47 B
Retained Earnings(225.77 M)9.33 B
Working Capital7.02 M1.48 B
Current Asset12.51 M9.34 B
   Acquisition by John Gay of 41100 shares of Novan subject to Rule 16b-3 [view details]

Novan Market Momentum

Traders often use several daily momentume indicators to supplement a more traditional technical analysis when analyzing securities such as Novan . With many different options, investors must choose the best indicators for them and familiarize themselves with how they work. We suggest combining traditional momentum indicators with more near-term forms of technical analysis such as Accumulation Distribution or Daily Balance Of Power. With their quantitative nature, daily value technical indicators can also be incorporated into your automated trading systems.

About Novan Buy or Sell Advice

When is the right time to buy or sell Novan Inc? Buying financial instruments such as Novan Stock isn't very hard. However, what challenging for most investors is doing it at the right time to beat the market. Proper market timing is something most people cannot do without sophisticated tools, which help to isolate the right opportunities. Macroaxis provides hands-on modules to deliver winning trades and diversify your portfolios on a daily basis. Most of our advising modules are very easy to use and apply.
Please read more on our stock advisor page.
 2020 2021 2022 (projected)
Accounts Payable1.19 M2.17 M1.79 M
Receivables4.86 M4.47 M3.72 M

Use Investing Ideas to Build Portfolios

In addition to having Novan 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?

Run Compulsion Thematic Idea Now

Compulsion
Compulsion Theme
Companies involved in research, development, and manufacturing of products with compulsion characteristics such as cigarettes, addictive drugs and alcohol. The Compulsion theme has 40 constituents at this time.
You can either use a buy-and-hold strategy to lock in the entire theme or actively trade it to take advantage of the short-term price volatility of individual constituents. Macroaxis can help you discover thousands of investment opportunities in different asset classes. In addition, you can partner with us for reliable portfolio optimization as you plan to utilize Compulsion Theme or any other thematic opportunities.
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Additionally, see Novan Analyst Recommendation to compare Macroaxis Buy or Sell Recommendation with the current analyst consensus. To check ratings for multiple equity instruments, please use the Instant Ratings tool. You can also try Money Managers module to screen money managers from public funds and ETFs managed around the world.

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Is Novan's industry expected to grow? Or is there an opportunity to expand the business' product line in the future? Factors like these will boost the valuation of Novan. If investors know Novan will grow in the future, the company's valuation will be higher. The financial industry is built on trying to define current growth potential and future valuation accurately. All the valuation information about Novan listed above have to be considered, but the key to understanding future value is determining which factors weigh more heavily than others.
Quarterly Earnings Growth YOY
(0.61) 
Market Capitalization
29.1 M
Quarterly Revenue Growth YOY
5.94
Return On Assets
(0.32) 
Return On Equity
(2.22) 
The market value of Novan Inc is measured differently than its book value, which is the value of Novan that is recorded on the company's balance sheet. Investors also form their own opinion of Novan's value that differs from its market value or its book value, called intrinsic value, which is Novan's true underlying value. Investors use various methods to calculate intrinsic value and buy a stock when its market value falls below its intrinsic value. Because Novan's market value can be influenced by many factors that don't directly affect Novan's underlying business (such as a pandemic or basic market pessimism), market value can vary widely from intrinsic value.
Please note, there is a significant difference between Novan's value and its price as these two are different measures arrived at by different means. Investors typically determine Novan value by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, Novan'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.