Is Black Knight, Inc. (NYSE:BKI)’s Volatility Making is a More Risky Play?

According to the latest data, Black Knight, Inc. (NYSE:BKI) has a current suggested portfolio ownership tally of 0.06100 (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 derived from 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 18.747600 (decimal).  This is the normal returns and standard deviation of the stock price over three months annualized. Looking further out, The 6-month volatility reading is 17.859000  and the 12 month is 18.532500.  

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Investing in the stock market has traditionally offered bigger returns than other types of investments. Along with the opportunity for higher returns comes a higher amount of risk. Stocks can be exposed to both market risk and business or financial risk. Market risk may be evident when the overall market takes a nose dive. Investors may hold stock of a company that has been performing great, but due to poor market conditions, the stock decreases in value. Investors may look to offset this risk by investing in other vehicles that don’t tend to move together. The business risk with stocks involves factors that may cause a company to perform poorly. This may include bad management, heightened competition, and declining company profits. Investors may try to limit this risk by creating a diversified portfolio including stocks from different sectors.

50/200 Simple Moving Average Cross

Black Knight, Inc. (NYSE:BKI) has a 1.07357 50/200 day moving average cross value. Cross SMA 50/200 (SMA = Simple Moving Average) and is calculated as follows:

Cross SMA 50/200 = 50 day moving average / 200day moving average. If the Cross SMA 50/200 value is greater than 1, it tell us that the 50 day moving average is above the 200 day moving average (golden cross), indicating an upward moving share price.

On the other hand if the Cross SMA 50/200 value is less than 1, this shows that the 50 day moving average is below the 200 day moving average (a death cross), and tells us that share prices has fallen recently and may continue to do so.

Returns and Margins

Taking look at some key returns and margins data we can note the following:

Black Knight, Inc. (NYSE:BKI) has Return on Invested Capital of 0.338564, with a 5-year average of 0.555706 and an ROIC quality score of 0.540590. 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.

Investors often hear the saying “buy low, sell high”. This may seem highly obvious to anybody looking to get into the stock market. Even though investors typically know they should do this, novices tend to do just the opposite, buy high and sell low. Often times, amateur investors will get carried away when a stock is trending higher. They may attempt to get in on the stock after a big move with hopes of the stock going higher and an overall thought that relates to the fear of missing out. Often times, investors will find themselves in a precarious situation when this occurs. They might have taken a chance on a stock that maybe was too good to be true. Investors may regret buying after the big move when the price has far exceeded the underlying value. Closely watching the fundamentals may help investors avoid getting into sticky situations such as buying too high.  

Black Knight, Inc. (NYSE:BKI) of the Support Services sector closed the recent session at 64.060000 with a market value of $9447309.

In looking at some Debt ratios, Black Knight, Inc. (NYSE:BKI) has a debt to equity ratio of 0.91385 and a Free Cash Flow to Debt ratio of 0.198239.  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 5.96078.  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.  Black Knight, Inc.’s ND to MV current stands at 0.176982. This ratio is calculated as follows: Net debt (Total debt minus Cash ) / Market value of the company.

Drilling down into some additional key near-term indicators we note that the Capex to PPE ratio stands at 0.107351 for Black Knight, Inc. (NYSE:BKI).  The Capex to PPE ratio shows you how capital intensive a company is. Stocks with an increasing (year over year) ratio may be moving to be more capital intensive and often underperform the market. Higher Capex also often means lower Free Cash Flow (Operating cash flow – Capex) generation and lower dividends as companies don’t have the cash to pay dividends if they are investing more in the business.

Investors may be searching high and low for the next breakout winner in the stock market. As companies continue to release quarterly earnings reports, investors will be looking for stocks that have the potential to move to the upside in the coming months. Tracking earnings can be a good way for investors to see how the company is stacking up to analyst estimates. Some investors prefer to track sell-side estimates very closely. Others prefer to do their own research and make their own best guesses on what the actual numbers will be. A solid earnings beat may help ease investor worries if the stock has been underperforming recently. On the flip side, a bad earnings miss may cause investors to take a much closer look at what the future prospects look like for the company.

In addition to Capex to PPE we can look at Cash Flow to Capex.  This ration compares a stock’s operating cash flow to its capital expenditure and can identify if a firm can generate enough cash to meet investment needs.  Investors are looking for a ratio greater than one, which indicates that the firm can meet that need. Comparing to other firms in the same industry is relevant for this ratio. Black Knight, Inc. (NYSE:BKI)’s Cash Flow to Capex stands at 17.418719.

Near-Term Growth Drilldown

Now we’ll take a look at some key growth data as decimals. One year cash flow growth ratio is calculated on a trailing 12 months basis and is a one year percentage growth of a firm’s cash flow from operations.  This number stands at -0.19214 for Black Knight, Inc. (NYSE:BKI).  The one year Growth EBIT ratio stands at -0.00883 and is a calculation of one year growth in earnings before interest and taxes.  The one year EBITDA growth number stands at -0.00560 which is calculated similarly to EBIT Growth with just the addition of amortization.

Taking even a further look we note that the 1 year Free Cash Flow (FCF) Growth is at -0.21384.  The one year growth in Net Profit after Tax is -0.35814 and lastly sales growth was 0.06205.

Investors have various approaches they can take when deciding what stocks to stuff the portfolio with. Some investors may choose to use fundamental analysis, and some may choose to use technical analysis. Others may employ a combination of the two approaches to make sure no stone is left unturned. Investors looking for bargains in the market may be on the lookout for the stock that offers the best value. This may involve finding stocks that have fallen out of favor with the overall investing community but still have low PE ratios and higher dividend yields. Whatever approach is used, investors may benefit greatly from making sure that all the homework is done, and all of the angles have been examined properly.    

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