Needle moving action has been spotted in New Relic Inc (NEWR) as shares are moving today on volatility 6.41% or $3.27 from the open. The NYSE listed company saw a recent bid of $54.25 and 216942 shares have traded hands in the session.
Investors are always looking to gain any possible advantage in the stock market. Knowing the various risk and return possibilities for various types of stocks can be critical to positive performance. Creating a balanced equity portfolio may be the essential first step when thinking about diving into the equity markets. Investors may come from all different types of backgrounds, and they may face completely different situations. Each investor may need to identify their objectives and try to figure out what’s best for their specific situation. Investors may want to take a conservative approach to the markets. Others will be looking to go in full throttle with a very aggressive plan. Whatever the choice, it is important to note that picking stocks based on previous returns will never guarantee future returns. Investors have many choices they can make when looking to purchase stocks. Figuring out levels of risk, expectations of returns, and the overall investment time horizon can all play a big part in crafting the initial plan.
Turning to Return on Assets or ROA, New Relic Inc (NEWR) has a current ROA of -18.89. This is a profitability ratio that measures net income generated from total company assets during a given period. This ratio reveals how quick a company can turn it’s assets into profits. In other words, the ratio provides insight into the profitability of a firm’s assets. The ratio is calculated by dividing total net income by the average total assets.
A higher ROA compared to peers in the same industry, would suggest that company management is able to effectively generate profits from their assets. Similar to the other ratios, a lower number might raise red flags about management’s ability when compared to other companies in a similar sector.
Now let’s take a look at how the fundamentals are stacking up for New Relic Inc (NEWR). Fundamental analysis takes into consideration market, industry and stock conditions to help determine if the shares are correctly valued. New Relic Inc currently has a yearly EPS of -1.18. This number is derived from the total net income divided by shares outstanding. In other words, EPS reveals how profitable a company is on a share owner basis.
Another key indicator that can help investors determine if a stock might be a quality investment is the Return on Equity or ROE. New Relic Inc (NEWR) currently has Return on Equity of -32.14. ROE is a ratio that measures profits generated from the investments received from shareholders.
In other words, the ratio reveals how effective the firm is at turning shareholder investment into company profits. A company with high ROE typically reflects well on management and how well a company is run at a high level. A firm with a lower ROE might encourage potential investors to dig further to see why profits aren’t being generated from shareholder money.
Another ratio we can look at is the Return on Invested Capital or more commonly referred to as ROIC. New Relic Inc (NEWR) has a current ROIC of -32.14. ROIC is calculated by dividing Net Income – Dividends by Total Capital Invested. Similar to ROE, ROIC measures how effectively company management is using invested capital to generate company income. A high ROIC number typically reflects positively on company management while a low number typically reflects the opposite.
Making ones way through the equity markets can be highly challenging. Investors might be reviewing strategies to see what has worked and what hasn’t worked in the past. After studying the broader economic factors that impact equity markets, it may be time to focus in on specific stocks to add to the portfolio. Investors may examine different sectors first in order to figure out where the majority of the growth potential lies. Doing all the necessary research on sectors can help pinpoint where the next major trend will be forming. This study may not lead to exact findings, but it may provide a better framework with which to operate moving forward in the stock market. Finding those big winners can take a lot of time and effort. Digging through the numbers may be cumbersome at times, but the rewards for sticking with it and putting in the work may pay off greatly down the line. Staying on top of economic news and the fundamentals of stocks in the portfolio on a consistent basis can help the investor better traverse the often rocky terrain that is the stock market.