AeroCentury Story

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ACY -- USA Stock  

USD 1.64  0.09  5.20%

AeroCentury Corp is scheduled to announce its earnings tomorrow. The stock experiences an active downward rally. AeroCentury Corp Book Value per Share is fairly stable at the moment as compared to the past year. AeroCentury Corp reported Book Value per Share of 15.05 in 2019. Current Ratio is likely to rise to 1.15 in 2020, whereas Earnings before Tax are likely to drop (21.7 M) in 2020. Although many aggressive traders are getting into industrials space, AeroCentury Corp may or may not be your first choice. We will evaluate why recent AeroCentury Corp price moves suggest a bounce in September.
Published over a month ago
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How much will AeroCentury Corp owe in September?
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. The company has Net Profit Margin of (62.49) %, which means that it does not effectively control expenditures or properly executes on its pricing strategies. This is way below average. In the same way, it shows Net Operating Margin of 44.82 %, which entails that for every 100 dollars of revenue, it generated 0.45 of operating income.
AeroCentury Corp financial leverage ratio helps determine the effect of debt on the overall profitability of the company. It measures the total debt position of AeroCentury Corp, including all of AeroCentury Corp's outstanding debt obligations, and compares it with the equity. In simple terms, the high financial leverage means the cost of production, together with running the business day-to-day, is high, whereas, lower financial leverage implies lower fixed cost investment in the business and generally considered by investors to be a good sign. So if creditors own a majority of AeroCentury Corp assets, the company is considered highly leveraged. Understanding the composition and structure of overall AeroCentury Corp debt and outstanding corporate bonds gives a good idea of how risky the capital structure of a business is and if it is worth investing in it. Please read more on our technical analysis page.

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

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?

The current price rise of AeroCentury Corp could raise concerns from investors as the firm closed today at a share price of 2.05 on 290,107 in volume. The company directors and management may have good odds in positioning the firm resources to exploit market volatility in September. The stock standard deviation of daily returns for 30 days investing horizon is currently 10.65. The very high volatility is mostly attributed to the latest market swings and not very good earnings reports from some of the AeroCentury Corp partners.

Liabilities Breakdown

Deposit Liabilities1.06 Million
Total Liabilities143.75 Million
Current Liabilities1.92 Million
Long-Term Liabilities7,867.42
Tax Liabilities2.78 Million

Over 3 percent rise for AeroCentury Corp. What does it mean for investors?

AeroCentury Corp current maximum drawdown rises over 53.57. 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.

Our Bottom Line On AeroCentury Corp

While some companies within the rental & leasing services industry are still a little expensive, even after the recent corrections, AeroCentury Corp may offer a potential longer-term growth to investors. To conclude, as of the 15th of August 2020, we believe that at this point, AeroCentury Corp is undervalued with below average probability of distress within the next 2 years. However, our primary 'Buy-Sell' recommendation on the company is Strong Sell.

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 Vlad Skutelnik 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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