ACCORD Story

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ACCFF -- USA Stock  

USD 5.58  0.09  1.64%

Accord Financial Group is a company out of Canada that provides short-term financing solutions to companies; They are a factoring company.  Accord will either lend to a company against their receivables or buy the accounts receivables from a company to provide them funding so that they can carry over their business.  The business model has been working for some time and the revenue is expanding.  Along with added revenue, the company has been able to increase its earnings over the years as well.

 

Published over a year ago
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Here is a factoring company you may want to factor into your consideration.

This is a slightly different company.  The business model is set to do very well in the coming months and years as the economy continues to expand and interest rates move higher.  And, this company is trading at a really great earnings per share.  

Volatility is a rate at which the price of ACCORD FINANCIAL 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 ACCORD FINANCIAL may increase or decrease. In other words, similar to ACCORD's beta indicator, it measures the risk of ACCORD FINANCIAL and helps estimate the fluctuations that may happen in a short period of time. So if prices of ACCORD FINANCIAL 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 ACCORD FINANCIAL's Liquidity

ACCORD FINANCIAL financial leverage refers to using borrowed capital as a funding source to finance ACCORD FINANCIAL CORP ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. ACCORD FINANCIAL 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. Please check the breakdown between ACCORD FINANCIAL's total debt and its cash.

How ACCORD utilizes its cash?

To perform a cash flow analysis of ACCORD FINANCIAL, investors first need to understand how to read the cash flow statement. A cash flow statement shows the amount of cash ACCORD FINANCIAL is receiving and how much cash it distributes out in a given period. The ACCORD FINANCIAL cash flow statement breaks down these inflows and outflows into different buckets, including operating activities, investing activities, and financing activities.

What is driving ACCORD FINANCIAL Investor Appetite?

Accord Financial Group is a company out of Canada that provides short-term financing solutions to companies; They are a factoring company.  Accord will either lend to a company against their receivables or buy the accounts receivables from a company to provide them funding so that they can carry over their business.  The business model has been working for some time and the revenue is expanding.  Along with added revenue, the company has been able to increase its earnings over the years as well.

Accord works on a spread basis, lending a certain amount of money versus the receivables with the expectation that the receivables will be paid in a timely enough manner that what Accord lends out versus what they take in and be paid the difference between.  It is a tricky business, but can be very lucrative.  Accord has done a solid job of creating income from this business model, as the net income and earnings per share show below:

2011:    $7.60  $0.85  

2012:    $6.40  $0.76  

2013:    $6.50  $0.80  

2014:    $6.90  $0.83  

2015:    $8.80  $1.05  

First, the current stock price is trading at just below $9.00 per share.  That puts the $1.05 per share earnings a really great opportunity for someone looking for a low ratio.  The stock market is not exactly selling that opportunity across the board.  The average ratio is sitting about 25 for price-to-earnings; an ultra-high level.  There are not too many other opportunities out there at this kind of ratio.  

So, a potential investor could buy into this stock and earn a 8.6% earnings per share ratio.  That turns into an 11.5% investment return.  Plus, there is the added benefit of increasing earnings and increasing revenue.  This translates into an ever-growing potential for more earnings.  There is momentum here.  It will feed on itself as the economy continues to expand.  

The business model that Accord work under, borrowing the funds to buy the accounts receivables, then earn the spread in between, allowing Accord to build up a trust base with its investors.  As interest rates move higher, as they have been doing over the past several months, the spread that Accord earns will increase even more allowing Accord to increase its revenue.  Accord is well positioned in this regards as it builds up its network of companies it works with, and investors that provide the cash to do business.  

With increased earnings potential via the spread differential, and increasing earnings from the company’s already growing business model, Accord should be trading at a much higher variable.  However, this is a Canadian company.  It is susceptible to currency fluctuations in its earnings.  But, the U.S. dollar has been depreciating as of late.  This will add in the variable of increasing earnings from the currency exposure.  Fro some time the USD has been pushing to highs not seen in many years.  This trend has been reversing and looks set to continue.  

There are many reasons why picking up Accord for your portfolio is a smart move.  The EPS ratio si the standout.  But, the added benefit of an expanding economy, which will drive the differential profit potential in favor of added earnings, as well as the currency movements that will bring in protection from fluctuations in the value of the Canadian dollar make Accord a strong buy.  The momentum is already there and it is gaining even more steam.  

This is one company whose stock will make it into my long term holdings, and it should do the same for you as well. 

About Contributor

This story should be regarded as informational only and should not be considered a solicitation to sell or buy any financial products. Macroaxis does not express any opinion as to the present or future value of any investments referred to in this post. This post may not be reproduced without the consent of Macroaxis LLC. Macroaxis LLC and David Taylor do not own shares of ACCORD FINANCIAL CORP. Please refer to our Terms of Use for any information regarding our disclosure principles.

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