Is Aehr Test (NASDAQ:AEHR) stock way too aggressive for baby boomers?


USD 25.87  0.92  3.43%   

It seems Aehr Test will continue to recover much faster as its share price surged up 0.68% today. Aehr Test Systems current daily volatility is 6.55 percent, with a beta of 0.98 and an alpha of 1.38 over DOW. Whilst many millenniums are getting more into current market swings, it makes sense to sum up Aehr Test Systems. We will analyze why it could be a much better year for Aehr Test shareholders.
Published over a month ago
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The company conducts business under Technology sector and is part of Semiconductor Equipment & Materials industry.
Investing in Aehr Test, 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 Aehr Test 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, frequently view the market will even out over time. This tendency of Aehr Test's 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. Please use the tools below to analyze the current value of Aehr Test in the context of predictive analytics.
Please note, it is not enough to conduct a financial or market analysis of a single entity such as Aehr Test. Your research has to be compared to or analyzed against Aehr Test's peers to derive any actionable benefits. When done correctly, Aehr Test's competitive analysis will give you plenty of quantitative and qualitative data to validate your investment decisions or develop an entirely new strategy towards taking a position in Aehr Test Systems.

How important is Aehr Test's Liquidity

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

How does Aehr Test utilize its cash?

To perform a cash flow analysis of Aehr Test, investors first need to understand how to read the cash flow statement. A cash flow statement shows the amount of cash Aehr Test is receiving and how much cash it distributes out in a given period. The Aehr Test cash flow statement breaks down these inflows and outflows into different buckets, including operating activities, investing activities, and financing activities.
Aehr Test Net Cash Flow from Operations is relatively stable at the moment as compared to the past year. Aehr Test reported last year Net Cash Flow from Operations of 1.51 Million

Aehr Test Correlation with Peers

Investors in Aehr Test can reduce exposure to individual asset risk by holding a diversified portfolio of assets in addition to a long position in Aehr Test Systems. Diversification will allow for the same portfolio return with reduced risk. The correlation table of Aehr Test and its peers is a two-dimensional matrix that shows the correlation coefficient between pairs of securities Aehr Test 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 Aehr Test for more details

What is the case for Aehr Test Investors

Aehr Test is moderately volatile given 3 months investment horizon. Aehr Test Systems secures Sharpe Ratio (or Efficiency) of 0.2, which signifies that the company had 0.2% of return per unit of standard deviation over the last 3 months. Our philosophy in foreseeing the risk of a stock is to use both market data as well as company specific technical data. We have analyze and collected data for twenty-eight different technical indicators, which can help you to evaluate if expected returns of 1.29% are justified by taking the suggested risk. Use Aehr Test mean deviation of 4.72, and Risk Adjusted Performance of 0.2652 to evaluate company specific risk that cannot be diversified away.

Will price continue to spike in November 2022?

Aehr Test latest market risk adjusted performance advances over 1.37. Aehr Test Systems is displaying above-average volatility over the selected time horizon. Investors should scrutinize Aehr Test Systems independently to ensure intended market timing strategies are aligned with expectations about Aehr Test volatility. Understanding different market volatility trends often help investors to time the market. Properly using volatility indicators enable traders to measure Aehr Test's stock risk against market volatility during both bullish and bearish trends. The higher level of volatility that comes with bear markets can directly impact Aehr Test's stock price while adding stress to investors as they watch their shares' value plummet. This usually forces investors to rebalance their portfolios by buying different stocks as prices fall.

Our Final Takeaway

While few other entities under the semiconductor equipment & materials industry are still a bit expensive, Aehr Test may offer a potential longer-term growth to retail investors. In closing, as of the 5th of October 2022, we believe Aehr Test is currently overvalued. It almost mirrors the market and projects below average odds of financial distress in the next two years. Our final 90 days buy-hold-sell recommendation on the enterprise is Cautious Hold.

Editorial Staff

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 Aehr Test Systems. Please refer to our Terms of Use for any information regarding our disclosure principles.

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