Lumentum Holdings Inc. (LITE) Stock: A Strong Pick In The technology Industry?

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Lumentum Holdings Inc. (LITE) is gaining in the market in today’s trading session. The stock, one that is focused on the tech sector, is currently priced at $60.64 after a move up of 10.33% so far today. When it comes to technology companies, there are a number of aspects that have the potential to generate gains in the market. News is one of the most common reasons for movement. Here are the most recent trending headlines relating to LITE:

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Aug-08-19 09:05PM U.S. Holds Off on Huawei Licenses as China Halts Crop-Buying
04:55PM Lumentum Earnings, Guidance Top Estimates Amid Huawei Technology Ban
08:55AM Lumentum (LITE) Q4 Earnings and Revenues Top Estimates
08:08AM Lumentum Trades Higher On Q4 Earnings
07:54AM Lumentum’s stock jumps after profit and revenue beats, upbeat guidance

Nonetheless, any time investors are making a decision with regard to investing, prospective investors should take a look at far more than just news, this is especially the case in the ever changing tech sector. Here’s what’s happing when it comes to Lumentum Holdings Inc..

Returns That LITE Investors Have Seen

While a move up on a single session, like what we’re seeing from Lumentum Holdings Inc. might lead to excitement in some investors, a single session move alone should not be the basis of a decision to, or not to, invest in a company. It is generally a good idea to look at trends experienced by the stock further out than a single trading session. In the case of LITE, here are the trends that we’ve seen:

  • Past 5 Trading Sessions – In the past seven days, LITE has seen a change in price amounting to 8.52%.
  • Monthly – The return on investment from Lumentum Holdings Inc. in the last month comes to 16.32%.
  • Quarterly – In the last three months, the stock has produced a return of 2.09%
  • Past Six Months – Over the past six months, we have seen a performance that amounts to 41.98% from the company.
  • This Year So Far – Since the close of last year LITE has produced a ROI of 44.35%.
  • Annually – Lastly, in the past full year, we have seen movement that comes to 4.82% from LITE. Over this period, the stock has traded at a high of -13.31% and a low of 63.89%.

Key Ratios

Digging into various key ratios having to do with a stock generally gives prospective traders a look of how risky and/or potentially profitable a pick might be. Below are some of the important ratios to consider when looking at LITE.

Short Ratio – The short ratio is a measure of short interest. The higher this ratio, the more investors believe that the value of the stock is going to fall. Throughout the sector, strong technology stocks can carry a lower short ratio. However, we also see a lot of short squeezes in the industry. Nonetheless, in regard to Lumentum Holdings Inc., the stock’s short ratio clocks in at 5.17.

Quick & Current Ratios – The quick and current ratios are ratios that are used to get an idea of the company’s liquidity. Basically, they measure whether or not a company can pay its debts when they mature based on current assets or quick assets. Because in tech, many companies rely heavily on the continuation of support from investors as they work to bring new technologies to market, these ratios can be bad. Nonetheless, some gems in the tech sector come with good current and quick ratios. As far as LITE, the quick and current ratios come to 3.20 and 4.00 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. as it relates to Lumentum Holdings Inc., that ratio works out to 19.74.

Cash To Share Value – Finally, the cash to share value comparison compares the total cash on hand to the price of the company’s stock. In the case of LITE, the cash to share value ratio works out to 8.84.

Moves From Big Money Players

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 LITE, here’s what we’re seeing:

Institutions own 95.90% of the company. Institutional interest has moved by -1.04% over the past three months. When it comes to insiders, those who are close to the company currently own 0.80% percent of LITE shares. Institutions have seen ownership changes of an accumulative -2.63% over the last three months.

What Analysts Say About Lumentum Holdings Inc.

While it’s not a good idea to unknowingly follow the opinions of analysts, it is a good idea to use their analysis when validating your own opinions before making investment decisions in the technology sector. Below you’ll find the most recent moves that we’ve seen from analysts as it relates to LITE.

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May-06-19 Reiterated Needham Strong Buy $70
Mar-29-19 Resumed Jefferies Buy $70
Mar-27-19 Upgrade Morgan Stanley Equal-Weight → Overweight $55 → $65
Mar-22-19 Upgrade JP Morgan Neutral → Overweight $50 → $65
Dec-14-18 Reiterated B. Riley FBR Buy $74 → $62

Financial Results And Expectations

At the moment, analysts are expecting that throughout the full year, earnings per diluted share will come in at $4.48. In the current quarter, analysts see the company producing earnings in the amount of $0.72. Over the last 5 years, LITE has generated revenue in the amount of $10.10% with earnings coming in at 105.50%. On a quarter over quarter basis, earnings have seen movement of 0 and revenue has seen movement of 44.90%.

What You Need To Know About Share Counts

Investors tend to have an interest in the total numbers of shares both outstanding and available. As far as Lumentum Holdings Inc., there are currently 78.87M and there is a float of 75.93M. This means that of the total of 78.87M shares of LITE in existence today, 75.93M are available to be traded by the public.

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 LITE, the short percent of the float is 11.31%.

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