Telefonaktiebolaget LM Ericsson (publ) (ERIC) Stock: A Strong Pick In The technology Sector?

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Telefonaktiebolaget LM Ericsson (publ) (ERIC) is trending down in the market in today’s trading session. The company, focused on the tech sector, is presently trading at $8.54 after tumbling -10.95% so far in today’s session. When it comes to tech companies, there are a number of aspects that have the potential to lead to declines in the market. One of the most common is news. Here are the recent stories relating to ERIC:

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Jul-17-19 04:40PM Why Textron, Nu Skin Enterprises, and Ericsson Slumped Today
03:04PM 3 Hot Investing Trends: Next Steps and Big Opportunities
12:58PM Why LM Ericsson’s Stock Fell 12% Today
12:17PM Telefonaktiebolaget LM Ericsson (ERIC) Q2 Earnings Conference Call Transcript
09:24AM Ericsson (ERIC) Q2 Earnings Miss, Sales Up Y/Y, Stock Down

However, any time investors are making a decision to invest, investors should look at much more than just news, this is especially the case in the ever changing tech sector. Here’s what’s happening with Telefonaktiebolaget LM Ericsson (publ).

How ERIC Has Been Trending

Although a single session decline, like the fall that we’re seeing from Telefonaktiebolaget LM Ericsson (publ) may lead to fear in some investors, a single session move by itself shouldn’t be the reason for a decision to, or not to, invest in a company. It is always smart to look at trends further out than a single session. When it comes to ERIC, here are the trends that we’ve seen:

  • Past Seven Days – Over the past 5 trading sessions, ERIC has seen a change in value amounting to -10.20%.
  • Monthly – The return on investment from Telefonaktiebolaget LM Ericsson (publ) in the last month has been -10.58%.
  • Quarterly – Over the past 3 months, the company has generated a ROI of -11.78%
  • Bi-Annually – Throughout the previous 6 months, investors have seen a performance of 0.59% from the stock.
  • YTD – Since the the first trading session of this year ERIC has generated a ROI of -3.72%.
  • Annually – Finally, in the past year, we have seen performance that works out to 11.63% out of ERIC. Over this period of time, the stock has sold at a high of -18.36% and a low of 12.07%.

Ratios That Are Notable

Digging into various ratios having to do with a company generally gives investors an understanding of just how dangerous and/or rewarding a an investment option may be. Below are a few of the important ratios to consider when digging into ERIC.

Short Ratio – The short ratio is a measure of short interest. The higher this ratio, the more investors believe that the price of the stock is going to tumble. In general, strong technology stocks can have a lower short ratio. However, we also see quite a few short squeezes in the space. Nonetheless, when it comes to Telefonaktiebolaget LM Ericsson (publ), it’s short ratio comes to 1.86.

Quick & Current Ratios – The quick and current ratios are tools that measure liquidity. Basically, they measure whether or not a company can pay for its debts as they mature with only quick assets or current assets. In the technology space, several companies rely heavily on continued investor support as they work to bring new technologies to market, these ratios can look damning. Nonetheless, quite a few gems in the tech space do have good current and quick ratios. When it comes to ERIC, the quick and current ratios add up to 1.00 and 1.30 respectively.  

Book To Share Value – The book to share value compares the the price of shares to the book value of assets owned by the company. when it comes to Telefonaktiebolaget LM Ericsson (publ), the book to share value ratio comes in at 2.72.

Cash To Share Value – Finally, the cash to share value comparison compares the total amount of cash the company has on hand to the value of shares. In the case of ERIC, the cash to share value ratio is 1.55.

What Are Big Money Players Doing With Telefonaktiebolaget LM Ericsson (publ)

An interesting fact that I’ve learned so far in my short time alive, or somewhat alive has been that smart investors tend to follow the moves made by big money. In general, investors that are looking to keep the risk down will keep an eye on trades made by institutions as well as those on the inside. With that said, is big money interested when it comes to ERIC? Here’s the scoop:

  • Institutional Investors – At the moment, institutional investors own 18.30% of the company. On the other hand, it is worth noting that institutional ownership has seen a move in the amount of -3.06% over the last quarter.
  • Insider Holdings – as it relates to insiders, insiders of the company currently own 0.90% of the company. Insider ownership of the company has seen a change of 0.00% over the past 3 months.

How Analysts Feel About Telefonaktiebolaget LM Ericsson (publ)

Although it’s rarely a good idea to unknowingly follow the thoughts of analysts, it is a good idea to consider their analysis when validating your own thoughts when it comes to making an investment decision in the technology sector. Below are the recent moves that we have seen from analysts with regard to ERIC.

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May-24-19 Upgrade Credit Suisse Neutral → Outperform
May-22-19 Upgrade BofA/Merrill Neutral → Buy
Dec-20-18 Upgrade Raymond James Underperform → Mkt Perform
Oct-19-18 Upgrade Argus Hold → Buy
Sep-19-18 Upgrade Credit Suisse Underperform → Neutral

Financial Performance

At the moment, analysts are expecting that throughout the full year, earnings per diluted share will come in at $0.54. In the current quarter, analysts see the company producing earnings in the amount of $0.08. Over the last 5 years, ERIC has generated revenue in the amount of $-1.50% with earnings coming in at -20.40%. On a quarter over quarter basis, earnings have seen movement of 375.60% and revenue has seen movement of 12.70%.

What’s The Float Looking Like?

Another point of interest that seems to be important to investors is the amount of shares of a company that are outstanding and currently available. At the moment, there are 3.32B shares of Telefonaktiebolaget LM Ericsson (publ) outstanding. Shares outstanding refers to the total amount of shares of a stock that exist. As far as the float goes, or the amount of shares that are actually available on the retail market, ERIC has a float of 3.27B.

Since we’re on the topic of share counts, there’s another relevant piece of data that you might find interesting. That would be the short percentage of the float. Those who sell shares short believe that the value of the stock is going to decline. When there’s a high short percentage of the float, generally considered to be anything over 40%, it’s a giveaway that the stock is likely headed for sharp declines ahead. Nonetheless, through my research, I’ve come to the conclusion that any short percent of the float over 26% is a risky bet. When it comes to ERIC, the short percent of the float is 0.36%.

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