Charles & Colvard, a player in the consumer cyclical sector, has recently seen a slight dip in its stock price, which could present a buying opportunity for those willing to take on some risk. The company, specializing in textiles, apparel, and luxury goods, has a notable insider ownership of 36.19%, suggesting confidence from those closest to the company. Despite facing challenges, with an operating income loss of 14M and retained earnings at a loss of 43.2M, the company maintains a solid current asset base of 20.65M. The beta of 1.43 indicates a higher volatility compared to the market, which could appeal to investors looking for potential upside. With a revenue of 29.95M and a gross profit of 4.7M, Charles & Colvard is navigating its financial landscape with a focus on long-term growth, making this dip a potential entry point for investors with a higher risk tolerance. Currently, Charles & Colvard's Payables Turnover remains steady compared to last year. By October 21, 2024, their Average Inventory is expected to increase to around $14.6 million, while the Price-to-Book (P/B) Ratio may decrease to 7.80. If you've been following Charles & Colvard, you might feel it's not the ideal time to purchase shares. The question remains: will retail investors maintain their positions, or are we on the brink of a sell-off?
Typically, a company's
financial statements are the reports that show the
financial position of the company. There are three main documents that fall into the category of financial statements. These documents include Charles Colvard income statement, its balance sheet, and the statement of cash flows. Potential Charles Colvard investors and stakeholders use financial statements to determine how well the company is positioned to perform in the future. Although Charles Colvard investors may use each financial statement separately, they are all related. The changes in Charles Colvard's assets and liabilities, for example, are also reflected in the revenues and expenses that we see on Charles Colvard's income statement, which results in the company's gains or losses. Cash flows can provide more information regarding cash listed on a balance sheet, but not equivalent to net income shown on the income statement. Please read more on our
technical analysis and
fundamental analysis pages.
The goal of Charles Colvard
fundamental analysis is to do accurate financial forecasts. There are several possible objectives to fundamental analysis, such as projecting of Charles Colvard performance into the future periods or doing a reasonable stock valuation. The intrinsic value of Charles Colvard shares is the value that is considered the true value of the share. If
the intrinsic value of Charles is higher than its market price, buying is generally recommended. If it is equal to the market price, it is recommended to hold; and if it is less than the market price, then one should sell all shares Charles Colvard. Please read more on our
fundamental analysis page.
Watch out for price decline
Please consider monitoring Charles Colvard on a daily basis if you are holding a position in it. Charles Colvard is trading at a penny-stock level, and the possibility of delisting is much higher compared to other stocks. However, just because the stock is trading under one dollar, does not mean it will be marked for deletion.
Most exchanges require public instruments, such as Charles Colvard stock to be traded above the $1 level to remain listed. If Charles Colvard stock price falls below $1 for 30 consecutive trading days, the exchange can delist it. Once the company reaches this point, they will be sent an initial price violation notice directly from an exchange.
How effective is Charles Colvard in utilizing its assets?
Charles Colvard reports assets on its Balance Sheet. It represents the amount of Charles resources that either has an existing economic value or will provide some form of benefits in the future. By effectively utilizing its assets, Charles Colvard aims to generate revenue, control costs, drive operational efficiency, and enhance profitability. Optimizing asset utilization helps maximize shareholder value and maintain a competitive position in the Apparel, Accessories & Luxury Goods space. To get a better handle on how balance sheet or income statements item affect Charles volatility, please check the breakdown of all its
fundamentals.
Charles Colvard Gross Profit
Charles Colvard Gross Profit growth is one of the most critical measures in evaluating the company. The Gross Profit growth rate is calculated simply by comparing Charles Colvard previous period's values with its current period's values. Each time period you're measuring should be of equal lengths the increase or decrease, in a company's Gross Profit between two periods. Here we show Charles Colvard Gross Profit growth over the last 10 years. Please check Charles Colvard's
gross profit and other
fundamental indicators for more details.
What is the case for Charles Colvard Investors
Although in the United States, the Securities and Exchange Commission has enforced strong rules to prevent insiders from engaging in insider trading, finding insiders among active shareholders of Charles Colvard is not uncomon. There are few distinct groups of Charles Colvard stakehholders that the SEC considers insiders. Investors usually gain information through their work as corporate directors, officers, or employees. If these individuals share the information with a friend, family, or business partner and the person who receives the information exchanges stock in the company, he or shie is also an insider. Let's take a look at how the ownership of Charles is distributed among investors.
Ownership Allocation
Charles Colvard retains significant amount of outstanding shares owned by
insiders. An
insider is usually defined as a CEO, other corporate executive, director, or
institutional investor who own at least 10% of the company's outstanding shares.
| Retail Investors54.65% | Insiders36.19% | Institutions9.16% |
| Retail Investors | 54.65 |
| Insiders | 36.19 |
| Institutions | 9.16 |
Please be aware that individual investors typically purchase shares for their personal accounts and usually in smaller quantities compared to institutional investors. While they might influence Charles Colvard's decisions if they own a significant combined portion of its shares, such influence is relatively rare. Conversely, institutional investors - like mutual funds, pension funds, hedge funds, and other investment companies - often have a substantial sway over Charles Colvard's decisions due to their larger holdings.
Asset Utilization
The asset utilization indicator refers to the revenue earned for every dollar of assets a company currently reports. Charles Colvard has an asset utilization ratio of 61.26 percent. This connotes that the Company is making $0.61 for each dollar of assets. An increasing asset utilization means that Charles Colvard is more efficient with each dollar of assets it utilizes for everyday operations.
| | | | | | Net Tangible Assets36.6 M |
| Total Current Assets | 23.98 Million | 18.29 |
| Non Current Assets Total | 21.58 Million | 16.45 |
| Non Currrent Assets Other | 24.07 Million | 18.35 |
| Intangible Assets | 199,039 | 0.15 |
| Other Current Assets | 911,912 | 0.7 |
| Other Assets | 23.83 Million | 18.17 |
| Net Tangible Assets | 36.58 Million | 27.89 |
Every cloud has a silver lining, and this might be the case for Charles & Colvard, as a recent dip in its stock price could offer a promising entry point for investors. Despite facing a net income loss of 19.6 million, the company maintains a solid financial footing with net tangible assets amounting to 39.5 million and a remarkably low debt-to-equity ratio of 0.06%. This financial stability, combined with its niche in the luxury goods sector, suggests potential for recovery and growth. With a market capitalization of just 4.68 million, the current valuation might present a bargain for those willing to look beyond the immediate challenges. As the company navigates through its hurdles, this minor dip could indeed be a strategic opportunity for long-term investors.
How will Charles retail investors react to the next fall?
Charles & Colvard's stock might be heading for a downturn, as its Information Ratio has slipped to -0.1. This suggests that the returns aren't justifying the risk involved, indicating underperformance relative to its volatility. Retail investors, who often react quickly to such signals, might consider revising their portfolios. They could either cut back on their holdings to avoid potential losses or stay put, hoping for a long-term recovery. The stock's low volatility, with a skewness of -0.09 and kurtosis of 1.46, provides some insight into its risk profile.
Understanding these volatility trends can help investors make informed decisions. In bearish markets, increased volatility can negatively affect Charles & Colvard's stock price, prompting investors to adjust their strategies as prices drop.Considering the recent 1 percent dip in Charles & Colvard's stock, it's important for potential investors to weigh the current market sentiment and analyst projections carefully. With an overall consensus leaning towards a "Strong Sell" and a highest estimated target price of just 1.22, the outlook appears cautious at best. While there's a potential upside price of 5.74, this is overshadowed by a possible downside price of 0.0152, suggesting significant volatility. For those contemplating a position, it may be wise to monitor the stock closely and consider the broader market conditions and company fundamentals before making any investment decisions..
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Nico Santiago is a PR Contributor to Macroaxis Editorial Board. Nico is a relatively new author here at Macroaxis and he likes to work on advertising and sponsored content and marketing for the company. Nico spends most of his time surfing when the weather is nice and he spends the rest of the year writing for various blogs and companies, as he works on his upcoming books, The Rise of the Financial Machines and Time Series Modelling with AI.
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