Shares of The Cheesecake Factory Incorporated (NASDAQ:CAKE) closed the previous trading session at $51.74, experiencing a change of 3.46% with 1,948,353 shares trading hands. The stock holds an average trading capacity of 1.06M shares for the past three months. When we compare its current volume with average for the same time of day, a Relative Volume (usually displayed as ratio) of 1.83 is obtained. It is kind of a like a radar for how “in-play” a stock is. The higher the relative volume is the more in play it is because more traders are watching and trading it. This is something that Investors should look for in all the stocks they are trading and is an important indicator to keep tabs on.
Is The Stock Safe to Invest? (Market Capitalization Analysis):
Now investors want to know the actual market worth of the company in the Stock Market. Market worth or Market capitalization is calculated by multiplying the price of a stock by its total number of outstanding shares. As a company has 45.58M shares outstanding and its current share price is $51.74, the market cap is $2.36B. From a safety point of view, a company’s size and market value do matter. All things being equal, large cap stocks are considered safer than small cap stocks. However, small cap stocks have greater potential for growth.
Although market capitalization is key to consider, don’t invest (or not invest) based solely on it. It’s just one measure of value. As a serious shareholder, you need to look at plentiful factors that can assist you determine whether any given stock is a good investment.
Is The Stock A Good Investment? (P/E Analysis):
Price-earnings ratio, also known as P/E ratio, is a tool that is used by shareholders to help decide whether they should buy a stock. Basically, the P/E ratio tells potential shareholders how much they have to pay for every $1 of earnings. The formula for calculating the price-earnings ratio for any stock is simple: the market value per share divided by the earnings per share (EPS). This is represented as the equation (P/EPS), where P is the market price and EPS is the earnings per share. As the current market price of the stock is $51.74 and diluted EPS for the trailing twelve month is 3.28, the P/E ratio for the stock comes out as 15.78.
Generally, shareholders love stocks with a low price-to-earnings (P/E) ratio. The perception is that the lower the P/E, the higher will be the value of the stock. The simple logic that a stock’s current market price does not justify (is not equivalent to) its higher earnings and therefore has room to run is behind shareholders’ inclination toward low P/E stocks.
Price/Earnings to Growth – PEG Ratio Analysis:
The price/earnings to growth ratio (PEG ratio) is a stock’s price-to-earnings (P/E) ratio divided by the growth rate of its earnings for a specified time period. For now, the company has PEG ratio of 1.45. The PEG ratio is used to determine a stock’s value while taking the company’s earnings growth into account, and is considered to provide a more complete picture than the P/E ratio.
Despite the fact that a low P/E ratio may make a stock look like a good buy, factoring in the company’s growth rate to get the stock’s PEG ratio can tell a different story. The lower the PEG ratio, the more the stock may be undervalued given its earnings performance. The degree to which a PEG ratio value indicates an over or underpriced stock varies by industry and by company type; though a broad rule of thumb is that a PEG ratio below one is desirable. Also, the accuracy of the PEG ratio depends on the inputs used. Using historical growth rates, for example, may provide an inaccurate PEG ratio if future growth rates are predictable to deviate from historical growth rates. To distinguish between calculation methods using future growth and historical growth, the terms “forward PEG” and “trailing PEG” are sometimes used.
Stock’s Liquidity Analysis:
Presently, 0.10% shares of The Cheesecake Factory Incorporated (NASDAQ:CAKE) are owned by insiders with 49.10% six-month change in the insider ownership. The insider filler data counts the number of monthly positions over 3 month and 12 month time spans. Short-term as well long term shareholders always focus on the liquidity of the stocks so for that concern, liquidity measure in recent quarter results of the company was recorded 0.50 as current ratio and on the opponent side the debt to equity ratio was 0.02 and long-term debt to equity ratio also remained 0.02.
Brief Overview on Stock’s Performances:
The stock showed weekly performance of 7.79%, which was maintained for the month at 6.57%. Likewise, the performance for the quarter was recorded as 2.64% and for the year was -18.51%. Analysts’ mean recommendation for the stock is 2.80 (A rating of less than 2 means buy, “hold” within the 3 range, “sell” within the 4 range, and “strong sell” within the 5 range).
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