Is Lithium riskier than Amazon Inc (NASDAQ:AMZN)?


USD 23.46  0.10  0.42%   

It looks like Amazon will be up for a correction faster as its share price went up 4.77% today to Lithium Americas's 12.82%. As many rational traders are trying to avoid basic materials space, it makes sense to go over Lithium Americas Corp a little further and understand how it stands against Amazon and other similar entities. We are going to analyze some of the competitive aspects of both Lithium and Amazon.
Published over a month ago
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By analyzing existing basic indicators between Lithium Americas and Amazon, you can compare the effects of market volatilities on both companies' prices and check if they can diversify away market risk if combined in one of your portfolios. You can also utilize pair trading strategies for matching a long position in Amazon with a short position in Lithium Americas. Check out our pair correlation module for more information.

Let's begin by analyzing the assets.
One of the ways to look at asset utilization of Lithium is to check how much profit was generated for every dollar of assets it reports. Lithium Americas Corp secures a negative usage of assets of -4.59 %, losing $0.0459 for each dollar of assets held by the firm. Inadequate asset utilization conveys that the company is being less effective with each dollar of assets it secures. Strictly speaking, asset utilization of Lithium Americas Corp shows how discouraging it operates for each dollar spent on its assets.
Out of tens of thousands of stocks, funds, and ETFs that trade on global exchanges each represent an individual company which you can analyze using comparative analysis. To determine which one of the two entities, such as Lithium or Netflix is a better fit for your portfolio, analyzing a few basic fundamental indicators is a good first step.

How important is Lithium Americas's Liquidity

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

What do experts say?

Stock analysis is a method for investors and traders to make buying and selling decisions. By studying and evaluating past and current data, investors and traders attempt to gain an edge in the markets by making informed decisions.
It is good to see analyst projects for Lithium Americas, but it might be worth checking our own buy vs. sell analysis

Correlation Between Lithium and Netflix

In general, Stock analysis is a method for investors and traders to make individual buying and selling decisions. Stock correlation analysis is also essential because it can help investors realize that they may not be as diversified as they think. Risk management strategies are usually required to make sure all portfolios are properly aligned against their risk tolerance level. You can consider holding Lithium Americas together with similar or unrelated positions with a negative correlation. For example, you can also add Netflix to your portfolio. If Netflix is not perfectly correlated to Lithium Americas it will diversify some of the market risks out of the positively correlated stocks in your portfolio. However, the disadvantage of this sort of hedging is that it can potentially affect your investment returns throughout market cycles. When Lithium Americas, for example, performs excellent and delivers stable returns, the negatively correlated position you locked in as a hedge may drag your returns down.
Please check pair correlation details between LAC and NFLX for more information.

Breaking down Lithium Americas Indicators

Cash and Equivalents Breakdown

Lets now take a look at Lithium Americas cash and equivalents. In accordance with the recently published financial statements, Lithium Americas Corp has 440.82 M in Cash and Equivalents. This is 9.99% lower than that of the Basic Materials sector and significantly higher than that of the Other Industrial Metals & Mining industry. The cash and equivalents for all United States stocks is 83.69% higher than that of Lithium Americas. As for Amazon we see cash and equivalents of 60.71 B, which is much higher than that of the Other Industrial Metals & Mining

60.7 B
LAC440.82 Million0.72
AMZN60.71 Billion99.28

A growth case for Lithium Americas

Current semi variance is at 8.03.
As of the 7th of October, Lithium Americas secures the Mean Deviation of 3.03, risk adjusted performance of 0.1942, and Downside Deviation of 3.21. In connection with fundamental indicators, the technical analysis model lets you check existing technical drivers of Lithium Americas Corp, as well as the relationship between them. Strictly speaking, you can use this information to find out if the firm will indeed mirror its model of past prices, or the prices will eventually revert. We were able to analyze nineteen technical drivers for Lithium Americas, which can be compared to its peers in the industry. Please verify Lithium Americas Corp treynor ratio, downside variance, kurtosis, as well as the relationship between the value at risk and expected short fall to decide if Lithium Americas Corp is priced some-what accurately, providing market reflects its recent price of 23.67 per share. Given that Lithium Americas Corp has jensen alpha of 0.6431, we recommend you to check Lithium Americas's last-minute market performance to make sure the company can sustain itself at a future point.

Our Bottom Line On Lithium Americas Corp

Whereas many of the other players within the other industrial metals & mining industry are still a little expensive, even after the recent corrections, Lithium Americas may offer a potential longer-term growth to investors. Taking everything into account, as of the 7th of October 2022, we believe that at this point, Lithium Americas is undervalued with very low chance of financial distress within the next 2 years. Our primary buy-hold-sell advice on the company is Buy.

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 Rifka Kats do not own shares of Lithium Americas Corp. Please refer to our Terms of Use for any information regarding our disclosure principles.

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