The value of a share stock is determined using its capital working ratio, price-earnings share, debt to equity ratio, earnings per share, returns on equity, and quick ratio. The portfolio analysis of an organization's stock shares determines guides investors on the average dividends expected annually or every quarter of the year. Stock shares that report a high current ratio, earnings per share, return on equity, and a low quick ratio of less than zero are profitable and worth investing in. In contrast, a company that has negative or zero earnings per share, price-earnings, return on equity, and debt to equity ratio higher than 1 is not worth a shareholder's investment. The analysis of my stock shares at Teladoc Health Inc. (TDOC), Vertex Pharmaceuticals (VTRX), and Ehealth Inc. (EHTH) guides my next steps in trading.
Currently, TDOC trades at $161.65, which is higher than the opening price of $151.30. As of March 31, 2020, TDOC had a working capital ratio of 23.63 and earnings per share of -$1.36 (CSIMarket.com). TDOC also had a price-earnings ratio of 105.47 as of the 2019 fiscal year and a quick ratio of 1.15 as of March 31, 2020. Finally, TDOC had a debt to equity ratio of 0.45 as of March 31, 2020 (gurufocus, 2020). I believe TDOC's low working capital ratio and negative earnings per share indicates that the firm is making losses. Additionally, TDOC's debt to equity ratio shows that the firm borrows too frequently. The company's quick ratio, as of March 31, 2020, is slightly higher than 1, which indicates that TDOC does not quickly turn over its inventories. Therefore, TDOC is currently performing poorly and making losses from my analysis. Hence, my next step will be to sell my shares to an investor at a relatively lower market share price to attract a buyer who will purchase a substantive share amount.
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Evaluation of Ehealth.Inc. stock shares’ performance will also guide my next decisions concerning keeping or selling the shares will be sensible. EHTH trades at $118.10 while the opening price for the stock share was 118.03 as of June 5, 2020 (Market watch, 2020). EHTH had a quick ratio of 0.00 as of March 31, 2020, and a price-earnings ratio of 47.10 as of June 5, 2020. Additionally, EHTH had $0.13 earnings per share ratio and a debt to equity ratio of 0.05 as of March 31, 2020 (Macrotrends, 2020). In my opinion, EHTH is worth investing in because of the organization's positive financial ratios. First, EHTH has positive earnings per share ratio and a 0.0 quick ratio, which indicates that the firm has a profitable revenue income. Moreover, EHTH has a very low debt to equity ratio, which shows that the firm controls its borrowing rates. Therefore, I will use the income from selling TTDOC's shares to purchase more EHTH shares because of the latter's impressive performance. Moreover, the opening and closing prices of EHTH as of June 5, 2020, indicates that the organization is stable financially, which provides an excellent reason to retain the shares at EHTH.
Furthermore, the analysis of my stock share performance at Vertex Pharmaceutical (VTRX) will guide my next decisions on the feasibility of retaining or selling the shares. VTRX opened at $270.82 and closed at $265.69 as of June 6, 2020. VTRX had a working capital ratio of 3.54 and a quick ratio of 3.42 as of March 31, 2020. Additionally, VTRX had $ 2.29 earnings per share ratio and a price-earnings share ratio of 41.21 as of March 31, 2020. VTRX also had a debt to equity ratio of 0.08 as of March 31, 2020 (Macrotrends, 2020). In my opinion, VTRX appears to be performing averagely, and I should observe the firm's financial ratios in the next quarter. Nevertheless, VTRX has a very high quick ratio, which shows that the organization's inventory turnover rate is slow. However, VTRX's working capital ratio, equity to debt ratio, price-earnings shares, and earnings per share ratios are acceptable, but their performance must be monitored in the firm's next quarter. Hence, the evaluation of the VTRX stock portfolio shows that the firm has an average performance compared to ETHT but is profitable.
The analysis of my portfolio shows that I have diversified my stock shares investments. I have invested in stocks of three firms in the healthcare industry that have different performance rates. ETHT performs the best because opening and closing stock share prices do not vary, which means that the firm is not volatile. I have also purchased shares in TDOC despite the firm's poor performance when purchasing my shares. TDOC's performance is unpredictable because of the significant difference between the firm's opening and closing stock shares prices. TDOC's financial ratios as of June 5, 2020, and March 31, 2020, indicate that the organization is currently making losses. However, the firm's closing price as of June 5, 2020, shows an increase, which suggests that stock buyers and sellers hope that the firm will perform better in the future. VRTX has an average performance based on the firm's financial ratios. I am only worried about the company's high quick ratio, which means that VTRX has the lowest rate of inventory turnover compared to EHTH and TDOC.
I believe investing in my stocks is a worthwhile venture, and the buyer will be assured of positive returns for their investment. For instance, TDOC may appear to be making losses, but the firm had an impressive performance in the stock market as of June 5, 2020. TDOC closed at $ 161.65 as of June 5, 2020, which is higher than the closing prices of ETHT and VTRX. A buyer who purchased TDOC's shares at the $151.30 opening price and decided to sell their shares at the closing price will have a high-interest rate. Moreover, one cannot limit TDOC to eternal poor performance because it offers healthcare services that are deemed to be essential. Furthermore, I am selling my TDOC shares at a lower price than the closing amount on June 5, 2020. Hence, the buyer will enjoy a discount compared to not risking their funds.
Buyers should also invest in ETHT because of the firm's impressive performance from scrutinizing its financial ratios. ETHT has a quick ratio of 0.0, which implies that the firm has a high rate of inventory turnover, which is impressive. Moreover, ETHT has a very low debt to equity ratio, which proves that the organization has more long term assets than liabilities. ETHT has a stock share price in the market that is also stable, which indicates that the firm is profitable and consistent. Moreover, EHTH has an impressive price-earnings share ratio and earnings per share. Hence, investing in ETHT would be a wise move because the firm has a proven high-performance level.
Finally, I urge my classmates to invest in VTRX because the firm's performance is stable. VTRX is a pharmaceutical company, and its financial ratios prove that it has the potential to perform better in the future. Moreover, VTRX's closing price as of June 5, 2020, shows that the organization has positive reviews, and stock buyers are willing to invest in the organization. The firm has an impressive working ratio and equity to debt ratio, which implies that VTRX has sufficient assets and low rates of debts. Therefore, investing in VTRX is a good move that will profit the stock shares' buyer.
The analysis of their financial ratios may value stocks. A company that has a low debt to equity ratio and quick ratio performs better in the stock market shares. Additionally, organizations with positive earnings per share and price-earnings shares are valuable and worth a buyer's investment. The evaluation of TDOC, EHTH, and VTRX shows the different performance levels of the three organizations. EHTH performs the best and shows revenue stability, while TDOC has a worrying trend. VTRX is an average performer, but investors should not desist from investing in the three firms for different reasons. First, the closing prices for EHTH and TDOC as of June 5, 2020, show that the firms attract buyers quickly. Although VTRX recorded a decline in the closing market of its shares as of June 5, 2020, the firm is worth investing in because of its stock performance. Therefore, the evaluation of stock portfolios guides the owner's next steps.
References
CSIMarket. (2020, June 5). Teladoc health Inc working capital ratio (TDOC) starting from first quarter 2020 to first quarter 2018, financial strength trends, rankings, comparisons, financial ratios. Retrieved from https://csimarket.com/stocks/singleFinancialStrength.php?code=TDOC&Wcr
Gurufocus. (2020, June 5). TDOC ROE % | Teladoc health - GuruFocus.com. Retrieved from https://www.gurufocus.com/term/ROE/NYSE:TDOC/ROE-/Teladoc-Health
Macrotrends. (2020, June 5). EHealth debt to equity ratio 2006-2020 | EHTH. Retrieved from https://www.macrotrends.net/stocks/charts/EHTH/ehealth/debt-equity-ratio
Market watch. (2020, June 5). EHealth Inc. Retrieved from https://www.marketwatch.com/investing/stock/ehth/profile
Marketwatch (2020, June 5) VRTX Stock Price. Retrieved from https://www.marketwatch.com/investing/stock/vrtx
