The Xcerra Corporation (NASDAQ:$XCRA) stock has seen little movement today, moving 0.00% since open. However, the company saw its stock selling for $9.865, on a trading volume of 48,109 shares trading hands.
Over the next couple of quarters, investors are going to be playing the long game and trying to see what direction the market will shift towards. It’s important to have a general idea of the market, but trying to predict every single move will likely end in disaster. That is why it’s important to take the time to find stocks that are high quality and reliable, and not just trying to capitalize on the hot stock of the day.
With this in mind, let’s take a look at Xcerra’s fundamentals. Fundamentals take into account industry, stock, and market conditions and help determine if a stock is priced correctly.
In the current year, Xcerra has so far reported $0.41 earnings per share. This number is arrived at by taking the total net income and dividing it by shares outstanding. In simple terms, this reveals how profitable a company is on a shareowner basis.
We can also take a look at three principle profitability ratios.
First, we can take a look at Return on Assets. The ROA is a ratio that measures net income produced by the company’s assets by taking net income and dividing it by the average total assets. Higher ROA ratings than peers can indicate a company is very skilled at capitalizing on their assets. Xcerra currently has an ROA of 5.52.
Next, we can take a look at the Return on Invested Capital. This ratio is found by dividing net income minus dividends by total capital invested. This ratio indicates how effective a company is at using invested capital to generate income. As with ROA, a higher number is a better reflection on the company. Xcerra currently has an ROIC of 7.11.
Finally, we can take a look at Return of Equity. ROE is a profitability ratio that measures profits generated from the investments received from shareholders. In layman’s terms, this ratio reveals how well a company turns shareholder investment into profits. Again, a higher number reflects better on a company, whereas a lower ROE might indicate a problem that investors may have to uncover before investing. Xcerra currently has a ROE of 7.57.
Taking into account factors like these are vital to a diverse and healthy stock portfolio. Bull markets are a good time for investors to take some liberties with their stock picks, but risk management should always be at the forefront of these matters.
Featured Image: depositphotos/denisismagilov
