Taking a Look Under the Hood at Azure Healthcare Limited (AZV.AX) Shares

Shares of Azure Healthcare Limited (AZV.AX) are moving on volatility today -6.25% or -0.005 from the open. The ASX listed company saw a recent bid of 0.075 and 112923 shares have traded hands in the session.

Investors may be digging through all of the most recent earnings report trying to locate a few names that are poised to make a run. Investors often take notice when a company beats or misses analyst projections by a wide margin. Once identifying these stocks, investors may want to look back at earnings history over the past few quarters. While one or two sub-par quarters may not be a legitimate cause for alarm, a long string of underperformance may be worth looking into. On the flip side, one or two great quarters may not be telling the complete picture either. Going behind the curtain and investigating the numbers may help the investor locate the next batch of stocks to add to the portfolio.

Now let’s take a look at how the fundamentals are stacking up for Azure Healthcare Limited (AZV.AX). Fundamental analysis takes into consideration market, industry and stock conditions to help determine if the shares are correctly valued. Azure Healthcare Limited currently has a yearly EPS of -0.03. 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.

Turning to Return on Assets or ROA, Azure Healthcare Limited (AZV.AX) has a current ROA of -32.00. 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.

Another key indicator that can help investors determine if a stock might be a quality investment is the Return on Equity or ROE. Azure Healthcare Limited (AZV.AX) currently has Return on Equity of -62.81. 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. Azure Healthcare Limited (AZV.AX) has a current ROIC of -62.72. 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.

When the stock market is doing well, there may be plenty of winners in the portfolio. Figuring out when to sell a winner can be a tricky proposition. Many investors will be quick to take profits while others may want to hold out for further gains. Selling winners too early or holding on to winners too long may have a negative impact on the trading portfolio. Finding that balance between securing profits and holding out to take higher profits in the future can be very helpful for the active investor.

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