Shares of Advantage Telecommunications Ltd (ATC.AX) have seen the needle move 2.44% or 0.005 in the most recent session. The ASX listed company saw a recent bid of 0.21 on 402855 volume.
Individual investors have a lot to study when dealing with the stock market. New investors may start out thinking that with enough capital, they can easily start securing substantial gains. While equity market investing can help individuals build wealth, it can also be highly risky. Market education may be an extremely important part of any investor’s game plan. Knowing exactly where the money is invested and why it is invested there, may be a big help when reviewing portfolio performance down the line. Any investor who takes the reins and decides to make their own decisions should realize the importance of a well-rounded stock market education.
Now let’s take a look at how the fundamentals are stacking up for Advantage Telecommunications Ltd (ATC.AX). Fundamental analysis takes into consideration market, industry and stock conditions to help determine if the shares are correctly valued.
First we’ll look at Return on Assets or ROA, Advantage Telecommunications Ltd (ATC.AX) has a current ROA of -21.41. This is a profitability ratio that measures net income generated from total company assets during a given period. This ratio reveals how quick a company can turn it’s assets into profits. In other words, the ratio provides insight into the profitability of a firm’s assets. The ratio is calculated by dividing total net income by the average total assets. A higher ROA compared to peers in the same industry, would suggest that company management is able to effectively generate profits from their assets. Similar to the other ratios, a lower number might raise red flags about management’s ability when compared to other companies in a similar sector.
Another key indicator that can help investors determine if a stock might be a quality investment is the Return on Equity or ROE. Advantage Telecommunications Ltd (ATC.AX) currently has Return on Equity of -29.34. ROE is a ratio that measures profits generated from the investments received from shareholders. In other words, the ratio reveals how effective the firm is at turning shareholder investment into company profits. A company with high ROE typically reflects well on management and how well a company is run at a high level. A firm with a lower ROE might encourage potential investors to dig further to see why profits aren’t being generated from shareholder money.
When it comes to investing in stocks, the question of risk will eventually need to be addressed. Of course, there are no guarantees when investing in the stock market. With this in mind, investors can proceed with a plan that helps minimize risk while still providing the opportunity to experience large profit potential. Each investor may have a different financial situation or tolerance for risk. There is often a fine line between being too aggressive or too conservative with equity investments. Finding that balance between the two extremes may be exactly what the earnest investor strives to do when tackling the markets.