NeoPhotonics Corporation (NPTN) Stock: Is This Tech Stock Worth Your Investment?


NeoPhotonics Corporation (NPTN) is trending down in the market today. The company, one that is focused on the tech space, is currently priced at $3.84 after a move down of -15.42% so far today. As it relates to technology companies, there are quite a few aspects that have the ability to generate price movement in the market. News tends to be one of the biggest reasons for the movement. Here are the recent stories associated with NPTN:

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May-17-19 02:43PM Huawei Suppliers Continue to Reel as Investors Gauge Trade Risks
11:29AM Wall Street Says Investors Are Missing Huge Huawei Trade Risks
11:24AM Why NeoPhotonics Shares Are Plunging Again on Friday
11:05AM NeoPhotonics Plunges on Huawei-Related Analyst Downgrade
08:37AM NeoPhotonics’ stock set to extend selloff after MKM cuts rating, slashed price target in half

However, any time investors are making a decision to invest, prospective investors should look into far more than news, this is especially the case in the ever changing technology industry. Here’s what’s going on with NeoPhotonics Corporation.

Trends That We’ve Seen From NPTN

Although a single session decline, like what we’re seeing from NeoPhotonics Corporation might cause fear in some investors, that by itself shouldn’t be the reason for a decision to, or not to, invest in a company. It’s generally smart to look at trends beyond a single session. When it comes to NPTN, here are the returns that investors have seen:

  • Past Seven Days – In the past 5 trading sessions, NPTN has seen a change in value that amounts to -36.32%.
  • Past 30 Days – The monthly ROI from NeoPhotonics Corporation works out to -43.03%.
  • Quarterly – Over the past 3 months, the stock has produced a return on investment that comes to -47.97%
  • Past Six Months – Over the past six months, investors have seen a performance that equates to -52.36% from the stock.
  • This Year So Far – Since the the last trading session of last year NPTN has generated a return of -40.74%.
  • Annually – Lastly, over the past year, we’ve seen movement that comes to -40.56% out of NPTN. In this period of time, the stock has traded at a high price of -59.49% and a low price of -9.43%.

Ratios To Pay Attention To

Digging into a few ratios associated with a stock can give traders an understanding of just how dangerous and/or potentially profitable a stock pick might be. Here are a few of the key ratios to consider when looking at NPTN.

Short Ratio – The short ratio is a measure of short interest. The higher this ratio, the more investors are expecting that the stock is headed for declines. Across the sector, strong tech stocks can come with a lower short ratio. However, we also tend to see a lot of short squeezes in the industry. Nonetheless, with regard to NeoPhotonics Corporation, it’s short ratio is 3.09.

Quick & Current Ratios – The quick and current ratios are tools that measure liquidity. Essentially, they measure If a company is able to pay for its debts as they mature using quick assets or current assets. In the tech sector, several companies rely heavily on the continuation of investor support as they work to bring new technologies to market, the quick and current ratios can look upsetting. However, several good picks in the tech space come with strong current and quick ratios. As far as NPTN, the quick and current ratios work out to 1.50 and 2.00 respectively.  

Book To Share Value – The book to share value compares the the share price to the book value of assets owned by the company. In this case, that ratio comes in at 3.29.

Cash To Share Value – The cash to share value ratio compares the total cash on hand to the price of shares. In this case, the cash to share value works out to 1.22.

Investors Tend To Follow The Big Money

Humans that are into investing seem to be infatuated with the term “Smart money follows big money.” It makes sense. Big money became big money by making smart decisions in the market. So, by following the moves of big money institutions and insiders, we can get a glimpse of what market pros think about a stock. When it comes to big money interest in NPTN, here’s what we’re seeing:

  • Institutional Investors – As it stands now, institutions own 71.30% of the company. Nonetheless, it is worth considering that institutional ownership has seen a move of -3.30% throughout the last 3 months.
  • Insiders – When it comes to insiders, those close to the company currently own 1.10% of NeoPhotonics Corporation. Insider ownership of the company has changed by -5.22% in the last quarter.

What Analysts Say About NeoPhotonics Corporation

Although it’s not a good idea to unknowingly follow the thoughts of analysts, it is a smart idea to use their analysis to validate your own when it comes to making investment decisions in the technology space. Here are the most recent moves that we’ve seen from analysts with regard to NPTN.

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May-17-19 Downgrade Needham Strong Buy → Hold
May-17-19 Downgrade MKM Partners Buy → Neutral $9 → $4.50
Apr-30-19 Initiated MKM Partners Buy
Dec-06-18 Downgrade B. Riley FBR Buy → Neutral $11 → $8.25
Aug-07-18 Upgrade B. Riley FBR Neutral → Buy $6.50 → $10

What We’ve Seen In Financial Results

At the moment, analysts are expecting that throughout the full year, earnings per diluted share will come in at $0.26. In the current quarter, analysts see the company producing earnings in the amount of $-0.01. Over the last 5 years, NPTN has generated revenue in the amount of $2.70% with earnings coming in at 2.70%. On a quarter over quarter basis, earnings have seen movement of 26.40% and revenue has seen movement of 15.70%.

What You Need To Know About Share Counts

Investors and traders seem to be interested in the total numbers of shares both available and outstanding. When it comes to NeoPhotonics Corporation, there are currently 54.95M with a float of 42.98M. These data mean that of the total of 54.95M shares of NPTN that are out there today, 42.98M are available to trade hands in the public space.

I also find it important to pay attention to the short percentage of the float. Think about it, if a large percentage of the float is shorted, the overall feeling among traders is that the company is going to fall hard. In regard to NPTN, the percentage of the float that is currently being sold short is 6.07%. Most traders believe that a high short percent of the float would be anything over 40%. Through my work, I have found that a short ratio over 26% is probably going to be a risky play.

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