Will China Automotive (NASDAQ:CAAS) price continue to spike in September?

CAAS
 Stock
  

USD 3.98  0.05  1.24%   

While some millenniums are indifferent towards consumer cyclical space, it makes sense to sum up China Automotive Sys in terms of its current potentials. As expected, China Automotive is starting to reaffirm its true potential as retail investors are becoming more and more confident in the future outlook. The returns on investing in China Automotive and the market returns of the last few months appear uncorrelated to each other. The record of invariable basic indicators of the enterprise connotes a short-term price swing for retail investors of China. China Automotive Sys is scheduled to announce its earnings today.
Published over a month ago
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The company's average rating is Strong Buy from 1 analysts. Do analysts base this consensus on technical analyses? We know that typical technical analysis utilizes price momentum, patterns, and trends looking at historical prices. It aims to identify signals based on China Automotive market sentiment investors' perception of the future value of China. Let us look at a few aspects of China technical analysis. The company has Profit Margin (PM) of 1.54 %, which maeans that even a very small decline in it revenue will erase profits resulting in a net loss. This is way below average. Similarly, it shows Operating Margin (OM) of 0.04 %, which suggests for every 100 dollars of sales, it generated a net operating income of 0.0.
Using predictive technical analysis, we will analyze different prices and returns patterns and diagnose historical swings to determine the real value of China Automotive Sys. In general, we focus on analyzing China Automotive stock price patterns and their correlations with different microeconomic environment and drivers. We also apply predictive analytics to build China Automotive's daily price indicators and compare them against related drivers such as momentum indicators and various other types of predictive indicators. Using this methodology combined with a more conventional technical analysis and fundamental analysis, we attempt to find the most accurate representation of China Automotive's intrinsic value. In addition to deriving basic predictive indicators for China Automotive, we also check how macroeconomic factors affect China Automotive price patterns. Please read more on our technical analysis page or use our predictive modules below to complement your research.
Sophisticated investors, who have witnessed many market ups and downs, frequently view the market will even out over time. This tendency of China Automotive'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 China Automotive 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 China Automotive. Your research has to be compared to or analyzed against China Automotive's peers to derive any actionable benefits. When done correctly, China Automotive'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 China Automotive Sys.

How important is China Automotive's Liquidity

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

How does China utilize its cash?

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

Closer look at China Automotive Semi Variance

China Automotive Sys has current Semi Variance of 5.82. Semi-variance provides a good measure of downside volatility for equity or a portfolio. It is similar to variance, but it only looks at periods where the returns are less than the target or average level.

Semi-variance is the square of semi-deviation. Semi-variance is calculated by averaging the deviations of returns that have a result that is less than the mean.

Semi Variance 
 = 
SUM(RET DEV)2 
N(ZERO) 
 = 
5.82
SUM = Summation notation
RET DEV = Actual return deviation over selected period
N(ZERO) = Number of points with returns less than zero
Let's now compare China Automotive Semi Variance to its closest peers:
CAAS
AAPL
CPS
JPM
GE
CAAS5.823547842670382
AAPL5.05
CPS46.63
JPM2.47
GE3.96

Our take on today China Automotive spike

Latest Jensen Alpha is up to 0.06. Price may fall again. China Automotive Sys currently demonstrates below-average downside deviation. It has Information Ratio of 0.01 and Jensen Alpha of 0.06. However, we advise investors to further question China Automotive Sys expected returns to ensure all indicators are consistent with the current outlook about its relatively low value at risk. Understanding different market volatility trends often help investors to time the market. Properly using volatility indicators enable traders to measure China Automotive's stock risk against market volatility during both bullying and bearish trends. The higher level of volatility that comes with bear markets can directly impact China Automotive'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.

China Automotive Implied Volatility

China Automotive's implied volatility exposes the market's sentiment of China Automotive Sys stock's possible movements over time. However, it does not forecast the overall direction of its price. In a nutshell, if China Automotive's implied volatility is high, the market thinks the stock has potential for high price swings in either direction. On the other hand, the low implied volatility suggests that China Automotive stock will not fluctuate a lot when China Automotive's options are near their expiration.

Our Final Take On China Automotive

While some firms within the auto parts industry are still a little expensive, even after the recent corrections, China Automotive may offer a potential longer-term growth to retail investors. To conclude, as of the 12th of August 2022, our current 90 days 'Buy-Sell' recommendation on the enterprise is Hold. We believe China Automotive is undervalued with close to average probability of financial unrest for the next two years.

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 Vlad Skutelnik do not own shares of China Automotive Sys. Please refer to our Terms of Use for any information regarding our disclosure principles.

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