The future of Sears is going south and quickly. The recent articles have given us reason to believe that even the CEO is pointing to the end of a brand many have known and loved. With the selling of their signature brand Craftsman, they have been waving the white flag. If you’re a potential investor, there are many different options out there and I would certainly by pass this company as a whole. It is not worth the time to research and understand how the company is doing because we can all see on the surface level.
Taking a look at the chart using the monthly time frame, we can see that price has just tanked over the years and has no signs of rounding back to their previous highs. Sure there may be good news here or there, but the odds are there won’t be any life saving news. Of course you can’t take the information straight from the chart, but if you read into the fundamentals, you will understand why price is where it’s at.
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 Global X income statement, its balance sheet, and the statement of cash flows. Potential Global X investors and stakeholders use financial statements to determine how well the company is positioned to perform in the future. Although Global X investors may use each financial statement separately, they are all related. The changes in Global X's assets and liabilities, for example, are also reflected in the revenues and expenses that we see on Global X'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 Global X
fundamental analysis is to do accurate financial forecasts. There are several possible objectives to fundamental analysis, such as projecting of Global X performance into the future periods or doing a reasonable stock valuation. The intrinsic value of Global X shares is the value that is considered the true value of the share. If
the intrinsic value of Global 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 Global X. Please read more on our
fundamental analysis page.
How important is Global X's Liquidity
Global X
financial leverage refers to using borrowed capital as a funding source to finance Global X Funds ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. Global X financial leverage is typically calculated by taking the company's all interest-bearing debt and dividing it by total capital. So the higher the debt-to-capital ratio (i.e., financial leverage), the riskier the company. Financial leverage can amplify the potential profits to Global X's owners, but it also increases the potential losses and risk of financial distress, including bankruptcy, if the firm cannot cover its debt costs. The degree of Global X's financial leverage can be measured in several ways, including by ratios such as the debt-to-equity ratio (total debt / total equity), equity multiplier (total assets / total equity), or the debt ratio (total debt / total assets). Please check the
breakdown between Global X's total debt and its cash.
An Additional Perspective On Global X Funds
Risks
For a full list of risks, you can take a look at the company’s recent 10-K report which will have the risks and details following them, but there are a couple to keep in mind while completing your research. First, the company may not be around long enough for you to reap a return on your investment. The struggling company has sold properties and closed stores in a desperate attempt to keep the company going. Secondly, the risk is your investment could hit zero and you would then loss everything. This doesn’t happen to often to these large and well established brands, but when they fail to adjust to changing trends, this is what ultimately happens.
Conclusion
Overall, I would stay far away from this company until they can prove they have either fixed the problem. Instead, look at healthier competitors and find one that could benefit your portfolio. If you still have questions after the fact, reach out to an investing professional as they can help point you in the right direction.
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Nathan Young is a Senior Member of Macroaxis Editorial Board - US Equity Analysis. With years of experience in the financial sector, Nathan brings a diverse base of knowledge. Specifically, he has in-depth understanding of application of technical and fundamental analysis across different equity instruments. Utilizing SEC filings and technical indicators, Nathan provides a reputable analysis of companies trading in the United States.
View Profile This story should be regarded as informational only and should not be considered a solicitation to sell or buy any financial products. Macroaxis does not express any opinion as to the present or future value of any investments referred to in this post. This post may not be reproduced without the consent of Macroaxis LLC. Macroaxis LLC and Nathan Young do not own shares of Global X Funds. Please refer to our
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