Is Iluka Resources Limited (ASX:ILU)’s Net Profit Growth of -2.77098 Sustainable?

Investors looking to measure the profitability of Iluka Resources Limited (ASX:ILU) should take note of the one year net profit growth ratio of -2.77098.  Ultimately profitability is the metric that matters for a firm and it’s investors.  Companies able to post consistent profits likely will see consistent share price growth as well.

There is no easy answer when attempting to address the tough question of how to best approach the equity market, especially when facing a turbulent investing climate. There are many different schools of thought when it comes to stock trading. Investors may have to first gauge their appetite for risk in order to build a solid platform on which to construct a legitimate strategy. The wealth of available information has made the road a bit smoother to travel for amateur investors. Making the transition to the next level is most likely on the minds of many dedicated investors. Tracking technicals and fundamentals may also help provide a roadmap to help separate the contenders from the pretenders. As we head into the second half of the year, it remains to be seen which way the market will lean. Investors may have to do all the necessary homework in order to find stocks that will thrive under any market conditions. 

When looking to find solid stocks with smooth upward momentum, investors can take a look at the 125/250 day adjusted slope indicator. At the time of writing Iluka Resources Limited (ASX:ILU) have a current value of 13.34307. The point of this calculation is to calculate a longer term average adjusted slope value that smooths out large stock price movements by using the average of the timeframe. This indicator is useful in helping find stocks that have been on an even upward trend over the past 6 months to a year.

Iluka Resources Limited (ASX:ILU) of the Mining sector closed the recent session at 8.680000 with a market value of $2537883.

Iluka Resources Limited (ASX:ILU) has a current suggested portfolio rate of 0.03590 (as a decimal) ownership. Target weight is the volatility adjusted recommended position size for a stock in your portfolio. The maximum target weight is 7% for any given stock. The indicator is based off of the 100 day volatility reading and calculates a target weight accordingly. The more recent volatility of a stock, the lower the target weight will be. The 3-month volatility stands at 27.418500 (decimal). This is the normal returns and standard deviation of the stock price over three months annualized.

Investing in the stock market often requires individuals to gauge how much risk they are willing to take on for potential reward. Piling on too much risk can put the investor out of their comfort zone. On the flip side, taking on too little risk may not provide the opportunity to receive enough returns to achieve previously stated goals. Finding that perfect balance may come with some first-hand experience that includes some trial and error. 

Debt

In looking at some Debt ratios, Iluka Resources Limited (ASX:ILU) has a debt to equity ratio of 0.04459 and a Free Cash Flow to Debt ratio of 6.363636. This ratio provides insight as to how high the firm’s total debt is compared to its free cash flow generated. In terms of Net Debt to EBIT, that ratio stands at -0.00385. This ratio reveals how easily a company is able to pay interest and capital on its net outstanding debt. The lower the ratio the better as that indicates that the company is able to meet its interest and capital payments. Lastly we’ll take note of the Net Debt to Market Value ratio. Iluka Resources Limited’s ND to MV current stands at -0.000492. This ratio is calculated as follows: Net debt (Total debt minus Cash ) / Market value of the company.

In looking at some key ratios we note that the Piotroski F Score stands at 8 (1 to 10 scale) and the ERP5 rank holds steady at 6002. The Q.I. Value of Iluka Resources Limited (ASX:ILU) currently reads 9.00000 on the Quant scale. The Free Cash Flow score of 3.257880 is also swinging some momentum at investors. The Australia based firm is currently valued at 11400.

There is no shortage of financial news and opinions as we live in the age of the 24 hour news cycle. Headlines and expert opinions seem to be around every corner when dealing with the stock market. Trying to keep up with all the swirling news can make ones head spin. Even though there may be some significant news mixed in, a lot of the headlines may not be worth paying much attention to. Figuring out what information is useful may take some time for the investor to figure out. Once the filter is in place, investors may find it much easier to focus on the important data. Making investment decisions solely based on news headlines may end up causing the portfolio to suffer down the line.

Some other notable ratios include the Accrual Ratio of 0.143737, the Altman Z score of 3.383647, a Montier C-Score of 1.00000 and a Value Composite rank of 29. Iluka Resources Limited (ASX:ILU) has Return on Invested Capital of 0.259272, with a 5-year average of 0.050110 and an ROIC quality score of 3.165454.  Why is ROIC important? It’s one of the most fundamental metrics in determining the value of a given stock.  It helps potential investors determine if the firm is using it’s invested capital to return profits.

High yielding stocks can be very tempting for investors. Trying to maximize the return on every dollar invested is a goal of many individuals. What investors have to remember is that the stocks that promise the highest return potential may also be some of the riskiest to own. Because past performance can’t guarantee future results, investors may need to do some extra research when adding high risk stocks to the portfolio. Most investors are always on the lookout to spot that next big stock winner before everyone else. Making sure that they are not adding too much extra risk when doing this may be the key to keeping the portfolio balanced.

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