Is SORL Auto Parts, Inc. Revving Up or Stalling Out?

SORL Auto Parts, Inc.

SORL Auto Parts, Inc. (NASDAQ:$SORL) recently saw its stock hit $4.00, an increase of 3.63% from open. The company also saw 149,451 shares trade hands during the trade session.

Investors looking for larger returns have traditionally turned towards the stock market. Of course, the opportunity for increased profits also means the potential for increased risk. This volatility is often seen on the market when a previously well-performing stock takes a turn for the worse, especially when there is market instability. The best way for investors to avoid losing it all in a market fluctuation is to invest in a diversified portfolio.

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With this in mind, let’s take a look at SORL Auto Parts Inc. Using fundamental analysis, investors can make sure that the company’s stock is not over or underpriced. An EPS of 1.26 is currently held by the company, which is determined by dividing the total net income by the outstanding shares.

Another good tool is the Return on Assets or ROA. The ROA can indicate how well a company turns assets into profits and is calculated by dividing the total net income by the average total assets. A higher ROA indicates that a company is well managed, whereas a lower number indicates there may be a problem with the company’s management. In the case of SORL, the company currently has an ROA of 6.18, an overall positive.

A similarly named tool that can be used is the Return on Invested Capital or ROIC. This metric is determined by dividing net income divided by total capital invested. SORL currently hold a ROIC of 11.33.

Finally, we can take a look at SORL’s Return on Equity, or ROE. This metric measures profits generated from shareholder’s investments. To put it simply, the ratio tells how effective a company is at generating profits on investments. A high ROE would reflect a company that is run well at its higher levels, whereas a low rating would indicate that an investor has to look into why investments are not generating profits. SORL currently holds an ROE of 11.33.

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