NZSE:NTL Income Statement Dec 28th 17
Can NTL’s asset-composition point to a higher beta?
An asset-heavy company tends to have a higher beta because the risk associated with running fixed assets during a downturn is highly expensive. I test NTL’s ratio of fixed assets to total assets in order to determine how high the risk is associated with this type of constraint. Given a fixed to total assets ratio of over 30%, NTL seems to be a company which invests a big chunk of its capital on assets that cannot be scaled down on short-notice. As a result, this aspect of NTL indicates a higher beta than a similar size company with a lower portion of fixed assets on their balance sheet. This outcome contradicts NTL’s current beta value which indicates a below-average volatility.
What this means for you:
Are you a shareholder? You could benefit from lower risk during times of economic decline by holding onto NTL. Take into account your portfolio sensitivity to the market before you invest in the stock, as well as where we are in the current economic cycle. Depending on the composition of your portfolio, NTL may be a valuable stock to hold onto in order to cushion the impact of a downturn. For more company-specific research on NTL, check out our our free analysis plaform here.
Are you a potential investor? Depending on the composition of your portfolio, NTL may be a valuable addition to cushion the impact of a downturn. Potential investors should look into its fundamental factors such as its current valuation and financial health. Take into account your portfolio sensitivity to the market before you invest in NTL, as well as where we are in the current economic cycle. Continue your research on the stock with our free fundamental research report for NTL here.
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.