Are Smart Investors Making the Right Decision? Adeia Inc. (ADEA)

Adeia Inc. (NASDAQ: ADEA) stock fell -2.23% on Tuesday to $9.21 against a previous-day closing price of $9.42. With 0.51 million shares changed hands, the volume of the stock remained lighter than its average volume of 0.55 million shares. During the session, the Software – Application company that operates in wider Technology sector, reached to the highest price of $9.57 whereas the lowest price it dropped to was $9.14. The 52-week range on ADEA shows that it touched its highest point at $11.85 and its lowest point at $3.54 during that stretch. It currently has a 1-year price target of $15.67. With its current market cap of 970.92 million, ADEA has annualized dividend of $0.20 while the current yield stands at 2.17%. Beta for the stock currently stands at 1.77.

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Price Performance and Earnings:

Stock performance is one of the indicators that investors use to determine whether they will profit from a stock. The price performance of ADEA was up-trending over the past week, with a rise of 0.99%, but this was up by 14.27% over a month. Three-month performance dropped to -11.53% while six-month performance fell -6.78%. The stock gained 109.26% in the past year, while it has lost -2.85% so far this year. A look at the trailing 12-month EPS for ADEA yields 1.07 with Next year EPS estimates of 1.51. For the next quarter, that number is 0.25. This implies an EPS growth rate of 371.20% for this year and 13.02% for next year. EPS is expected to grow by 15.00% annually over the next five years; however, over the past five years, the company experienced an annual growth rate of 24.90%.

Float and Shares Shorts:

At present, 105.58 million ADEA shares are outstanding with a float of 102.49 million shares on hand for trading. On Apr 27, 2023, short shares totaled 1.75 million, which was 1.65% higher than short shares on Mar 30, 2023. In addition to Mr. Paul E. Davis as the firm’s CEO & Director, Mr. Keith A. Jones serves as its Chief Financial Officer.

Institutional Ownership:

Through their ownership of 92.73% of ADEA’s outstanding shares, institutional investors have majority control over the company. Other institutions hold 56.29% of ADEA, in contrast to 35.90% held by mutual funds. Shares owned by individuals account for 1.38%. As the largest shareholder in ADEA with 14.82% of the stake, BlackRock Fund Advisors holds 15,593,906 shares worth 15,593,906. A second-largest stockholder of ADEA, The Vanguard Group, Inc., holds 12,303,046 shares, controlling over 11.69% of the firm’s shares. Columbia Management Investment Ad is the third largest shareholder in ADEA, holding 11,665,603 shares or 11.09% stake. With a 6.73% stake in ADEA, the Columbia Seligman Technology & In is the largest stakeholder. A total of 7,076,541 shares are owned by the mutual fund manager. The iShares Core S&P Small Cap ETF, which owns about 6.66% of ADEA stock, is the second-largest Mutual Fund holder. It holds 7,007,031 shares valued at 53.53 million. Vanguard Total Stock Market ETF holds 2.91% of the stake in ADEA, owning 3,061,811 shares worth 23.39 million.

An Overview of Recent Financials:

Understanding a company as a customer does not mean you will understand it as an investor. The wise investor uses quantitative research to analyze metrics such as revenue, net income, and earnings. In its fiscal quarter reported on Mar 30, 2023, ADEA reported revenue of $234.02M and operating income of $28.01M. The EBITDA in the recently reported quarter was $72.94M and diluted EPS was -$0.05.

Analysts Ratings:

Reading analyst opinions is an effective way to decide where to invest, and there are several opinions available for ADEA since 0 analysts follow the stock currently. In the same way, a target price assigned to a stock can also reveal much about its potential. With ADEA analysts setting a high price target of $17.00 and a low target of $14.00, the average target price over the next 12 months is $15.67. Based on these targets, ADEA could surge 84.58% to reach the target high and rise by 52.01% to reach the target low. Reaching the average price target will result in a growth of 70.14% from current levels.

EPS: Estimates vs Actual

It is also common to use earnings estimates to evaluate a firm’s growth potential and to determine trading strategy.

Dividends & Yield:

In terms of dividends, ADEA has a current ratio of $0.2, which is $0.2 over the trailing 12-months, while a dividend of $0.51 is likely to be paid on average over the next five years. Dividend yield is another indicator that appeals to many investors, and ADEA currently yields $2.17. In the past year, ADEA’s dividend yield has been $2.17, but when looking at the stock over the past five years, its yield has been $3.07. Accordingly, ADEA has a current buyback yield of $1.17. This was $1.17 for the TTM, and it was $3.84 for the past five years.

Summary of Insider Activity:

Insiders traded ADEA stock several times over the past three months with 4 Buys and 3 Sells. In these transactions, 331,970 shares were bought while 21,852 shares were sold. The number of buy transactions has increased to 11 while that of sell transactions has risen to 15 over the past year. The total number of shares bought during that period was 810,055 while 107,958 shares were sold.

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