AeroCentury Story

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ACY -- USA Stock  

USD 2.26  0.03  1.35%

It appears AeroCentury Corp will continue to recover much faster as its share price surged up 3.61% today. The entity's current daily volatility is 11.52 percent, with a beta of -0.2 and an alpha of 1.9 over DOW. While some of us are getting more passionate about business services, it makes sense to break down AeroCentury Corp in greater detail to make a better estimate of its volatility. We will evaluate why we are still optimistic in anticipation of a recovery.
Published over a month ago
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Will AeroCentury Corp (NYSEMKT:ACY) current volatility rise scare investors?
AeroCentury Corp has roughly 1.75 M in cash with 3.59 M of positive cash flow from operations. This results in cash-per-share (CPS) ratio of 1.13. The company has 112.1 M in debt with debt to equity (D/E) ratio of 8.2, demonstrating that AeroCentury Corp may be unable to create cash to meet all of its financial commitments. AeroCentury Corp has a current ratio of 4.85, demonstrating that it is liquid and is capable to disburse its financial commitments when the payables are due.
Investing in AeroCentury Corp, just like investing in any other equity instrument, is characterized by a strong risk-return correlation. High risks mean high returns and low risk means lower expected returns. Risk management is the act of identifying and assessing the potential risk and developing strategies to minimize these risks and earn maximum possible profits while holding AeroCentury Corp along with other instruments in the same portfolio. Using conventional technical analysis and fundamental analysis to select individual securities into a portfolio complements risk management and adds value to overall investors' investing strategies.

How important is AeroCentury Corp's Liquidity

AeroCentury Corp financial leverage refers to using borrowed capital as a funding source to finance AeroCentury Corp ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. AeroCentury Corp 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 AeroCentury Corp's total debt and its cash.

How AeroCentury utilizes its cash?

To perform a cash flow analysis of AeroCentury Corp, investors first need to understand how to read the cash flow statement. A cash flow statement shows the amount of cash AeroCentury Corp is receiving and how much cash it distributes out in a given period. The AeroCentury Corp cash flow statement breaks down these inflows and outflows into different buckets, including operating activities, investing activities, and financing activities. AeroCentury Corp Net Cash Flow from Operations is fairly stable at the moment as compared to the past year. AeroCentury Corp reported Net Cash Flow from Operations of 8.17 Million in 2019

AeroCentury Corp Correlation with Peers

Investors in AeroCentury can reduce exposure to individual asset risk by holding a diversified portfolio of assets in addition to a long position in AeroCentury Corp. Diversification will allow for the same portfolio return with reduced risk. The correlation table of AeroCentury Corp and its peers is a two-dimensional matrix that shows the correlation coefficient between pairs of securities AeroCentury is related in some way. The cells in the table are color-coded to highlight significantly positive and negative relationships. Each cell shows the correlation between one pair of equities and can be used to run pair trading strategies or create efficient portfolios with your current brokerage. Please check volatility of AeroCentury for more details

Purchase by Michael Magnusson of 1000 shares of AeroCentury Corp

Legal trades by AeroCentury Corp insiders are very common, as founders, directors, or employees of any publicly traded firm often have stock or stock options. These trades are made public in the United States through the filing of Form 4 of the Securities and Exchange Commission. Below entry was recorded recently and is publicly available as an insider trade:
AeroCentury insider trading alert for perchase of common stock by Michael Magnusson, President, on 23rd of August 2020. This event was filed by Aerocentury Corp with SEC on 2019-11-22. Statement of changes in beneficial ownership - SEC Form 4. Michael Magnusson currently serves as president, director and managing director of jmc of AeroCentury Corp [view details]   
Note, although insider trading is legal, in the United States, Canada, Australia, and Germany, for mandatory reporting purposes, corporate insiders are defined as a company's officers, directors, and any beneficial owners of more than 10% of a class of the company's equity securities.

Is AeroCentury Corp valued reasonably by the market?

AeroCentury Corp is dangerous given 1 month investment horizon. AeroCentury Corp secures Sharpe Ratio (or Efficiency) of 0.18, which signifies that the company had 0.18% of return per unit of risk over the last month. Our standpoint towards foreseeing the volatility of a stock is to use AeroCentury Corp market data together with company specific technical indicators. We were able to break down twenty-eight different technical indicators, which can help you to evaluate if expected returns of 2.06% are justified by taking the suggested risk. Use AeroCentury Corp Downside Deviation of 6.62, mean deviation of 7.5, and Risk Adjusted Performance of 0.2759 to evaluate company specific risk that cannot be diversified away.
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AeroCentury Corp implied volatility may change after the rise

The maximum drawdown is down to 53.57 as of today. AeroCentury Corp is displaying above-average volatility over the selected time horizon. Investors should scrutinize AeroCentury Corp independently to ensure intended market timing strategies are aligned with expectations about AeroCentury Corp volatility.

The Current Takeaway on AeroCentury Corp Investment

While some companies under the rental & leasing services industry are still a bit expensive, AeroCentury Corp may offer a potential longer-term growth to investors. The inconsistency in the assessment between current AeroCentury valuation and our trade advice on AeroCentury Corp is due to the recent market swings and your selection of investing horizon. Please use our equity advice module to run different scenarios to ensure your current risk level and investment horizon are fully reflective of your current investing preferences in regards to AeroCentury Corp.

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 Achuva Shats do not own shares of AeroCentury Corp. Please refer to our Terms of Use for any information regarding our disclosure principles.

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