Standard Stock Story

SMP

Stock

USD 44.47 0.66 1.46%

Macroaxis Story

As many rational traders are trying to avoid consumer cyclical space, it makes sense to recap Standard Motor Products a little further and understand how it stands against Aptiv PLC and other similar entities. We are going to focus on some of the competitive aspects of both Standard and Aptiv.

Published over three months ago

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Standard Motor Products Current Investor Sentiment

Investor biases related to Standard's public news can be used to forecast risks associated with investment in Standard. The trend in average sentiment can be used to explain how an investor holding Standard can time the market purely based on public headlines and social activities around Standard Motor Products. Please note that most equiteis that are difficult to arbitrage are affected by market sentiment the most.

Standard's market sentiment shows the aggregated news analyzed to detect positive and negative mentions from the text and comments. The data is normalized to provide daily scores for Standard's and other traded tickers. The bigger the bubble, the more accurate is the estimated score. Higher bars for a given day show more participation in the average Standard's news discussions. The higher the estimate score, the more favorable is the investor's outlook on Standard.

Should you short your Aptiv PLC (NYSE:APTV) and Standard (NYSE:SMP) positions after a surge?

By analyzing existing primary indicators between Standard and Aptiv, 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 Aptiv with a short position in Standard. Check out our pair correlation module for more information.

Let's begin by analyzing the assets.

The asset utilization indicator refers to the revenue earned for every dollar of assets a company currently reports. Standard has an asset utilization ratio of 186.47 percent. This suggests that the company is making $1.86 for each dollar of assets. An increasing asset utilization means that Standard Motor Products is more efficient with each dollar of assets it utilizes for everyday operations.

Should you short your Aptiv PLC (NYSE:APTV) and Standard (NYSE:SMP) positions after a surge?

How important is Standard's Liquidity

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

How does Standard utilize its cash?

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

Standard Net Cash Flow from Operations is very stable at the moment as compared to the past year. Standard reported last year Net Cash Flow from Operations of 60.21 Million

Breaking it down

Revenue is income that a firm generates from business activities such us rendering services or selling goods to customers. It is a crucial part of a business and an essential item when evaluating a company's financial statements. Revenues from a firm's primary business operations can be reported on the income statement as sales revenue, net sales, or simply sales, depending on the industry in which a given company operates.
Revenue is typically recorded when cash or cash equivalents are exchanged for services or goods and can include product or services discounts, promotions, as well as early payments on invoices or services rendered in advance.

Revenue Breakdown

Let me take a closer look at Standard revenue. Based on the latest financial disclosure, Standard Motor Products reported 1.27 B of revenue. This is 82.19% lower than that of the Consumer Cyclical sector and 74.99% lower than that of the Auto Parts industry. The revenue for all United States stocks is 86.54% higher than that of Standard. As for Aptiv PLC we see revenue of 15.7 B, which is 209.17% higher than that of the Auto Parts

Sector

5.1 B

APTV

15.7 B

SMP	1.27 Billion	5.76
Sector	5.08 Billion	23.03
APTV	15.7 Billion	71.21

Standard showing symptom of lower volatility

The maximum drawdown is down to 7.98 as of today. Standard Motor Products exhibits very low volatility with skewness of -0.06 and kurtosis of 0.54. However, we advise investors to further study Standard Motor Products technical indicators to make sure all market info is available and is reliable. Understanding different market volatility trends often help investors to time the market. Properly using volatility indicators enable traders to measure Standard'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 Standard'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.

Standard Implied Volatility

Standard's implied volatility exposes the market's sentiment of Standard Motor Products stock's possible movements over time. However, it does not forecast the overall direction of its price. In a nutshell, if Standard'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 Standard stock will not fluctuate a lot when Standard's options are near their expiration.

The Bottom Line

Although other entities within the auto parts industry are still a little expensive, even after the recent corrections, Standard may offer a potential longer-term growth to insiders. While some insiders may not share our view, we believe it may be a good time to increase your existing holdings in Standard as the risk-reward trade off is appealing enough to hold a position. Please use our equity advice module to run different scenarios to ensure your current risk level and investment horizon are fully reflective of your current investing preferences in regards to Standard.

Editorial Staff

Raphi Shpitalnik is a Junior Member of Macroaxis Editorial Board. Raphael is a young entrepreneur who joined Macroaxis on a part-time base at the beginning of the pandemic and eventually acquired a real test for investing and fintech. He likes to analyze different equity instruments across a wide range of industries, focusing primarily on consumer products, sports, fintech, cannabis, and AI. View Profile

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 Raphi Shpitalnik do not own shares of Standard Motor Products. Please refer to our Terms of Use for any information regarding our disclosure principles.

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