| 2017 | 2018 | 2019 | 2020 (projected) | Consolidated Income | 139.1 M | 168 M | 184.4 M | 162.85 M | Direct Expenses | 5.4 B | 5.77 B | 6.04 B | 5.21 B |
Will Asbury Automotive (NYSE:ABG) latest volatility spike continue?
 | By Vlad Skutelnik | Macroaxis Story |
Considering the 60-days investment horizon, Asbury Automotive is expected to generate 2.48 times more return on investment than the market. However, the company is 2.48 times more volatile than its market benchmark. It trades about 0.22 of its potential returns per unit of risk. The DOW is currently generating roughly 0.1 per unit of risk. As many old-fashioned traders are trying to avoid consumer cyclical space, it makes sense to digest Asbury Automotive Group a little further and try to understand its current volatility patterns. We will evaluate if the latest Asbury Automotive price volatility suggests a bounce in August.
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Reviewed by Michael Smolkin
Asbury Automotive Group has roughly 388.6 M in cash with 412.3 M of positive cash flow from operations. This results in cash-per-share (CPS) ratio of 20.15. Volatility is a rate at which the price of Asbury Automotive or any other equity instrument increases or decreases for a given set of returns. It is measured by calculating the standard deviation of the annualized returns over a given period of time and shows the range to which the price of Asbury Automotive may increase or decrease. In other words, similar to Asbury's beta indicator, it measures the risk of Asbury Automotive and helps estimate the fluctuations that may happen in a short period of time. So if prices of Asbury Automotive fluctuate rapidly in a short time span, it is termed to have high volatility, and if it swings slowly in a more extended period, it is understood to have low volatility. Please read more on our technical analysis page.
How important is Asbury Automotive's Liquidity
Asbury Automotive financial leverage refers to using borrowed capital as a funding source to finance Asbury Automotive Group ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. Asbury Automotive financial leverage is typically calculated by taking the company's all interest-bearing debt and dividing it by total capital. So the higher the debt-to-capital ratio (i.e., financial leverage), the riskier the company. Financial leverage can amplify the potential profits to Asbury Automotive's owners, but it also increases the potential losses and risk of financial distress, including bankruptcy, if the firm cannot cover its debt costs. The degree of Asbury Automotive's financial leverage can be measured in several ways, including by ratios such as the debt-to-equity ratio (total debt / total equity), equity multiplier (total assets / total equity), or the debt ratio (total debt / total assets). Please check the breakdown between Asbury Automotive's total debt and its cash.
Asbury Automotive Gross Profit
Asbury Automotive Gross Profit growth is one of the most critical measures in evaluating the company. The Gross Profit growth rate is calculated simply by comparing Asbury Automotive previous period's values with its current period's values. Each time period you're measuring should be of equal lengths the increase or decrease, in a company's Gross Profit between two periods. Here we show Asbury Automotive Gross Profit growth over the last 10 years. Please check Asbury Automotive's gross profit and other fundamental indicators for more details.
Asbury Automotive Volatility Drivers
Asbury Automotive unsystematic risk is unique to Asbury Automotive and usually not directly affected by the market or economic environment. An example of unsystematic risk is the possibility of poor earnings or a layoff due to coronavirus. One may mitigate nonsystematic risk by buying different securities in the same industry or by buying in different sectors. For example, if you have a position in Asbury Automotive you can also buy Sonic Automotive. You can also mitigate this risk by investing in the consumer discretionary sector as well as in companies having nothing to do with it. This type of risk is also called diversifiable risk and can be understood from analyzing Asbury Automotive important indicators over time. Here we run a correlation analysis between relevant fundamental ratios over at least ten year period to find a relationship in the way they react to changes in Asbury Automotive income statement and balance sheet. Here are more details about Asbury volatility.Click cells to compare fundamentals
Breaking down Asbury Automotive Further
The latest price spikes of Asbury Automotive could raise concerns from shareholders as the firm closed today at a share price of 104.57 on 337,079 in volume. The company executives may have good odds in positioning the firm resources to exploit market volatility in August. The stock standard deviation of daily returns for 30 days investing horizon is currently 4.19. This high volatility is attributed to the latest market swings and not so good earnings reports for some of the Asbury Automotive partners.
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