AAR Corp Story

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AIR -- USA Stock  

USD 39.78  0.87  2.14%

23% of stocks are less volatile than AAR Corp, and above 96% of all equities are expected to generate higher returns over the next 90 days. While some risk-seeking retail investors are getting worried about industrials space, it is reasonable to sum up AAR Corp as a possible investment alternative. We are going to discuss if the current expected returns justify AAR Corp's volatility. AAR Corp's low volatility may still impact the value of the stock as we estimate it as currently overvalued. The real value, based on our analysis, is getting close to 37.11 per share.
Published over three weeks ago
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Is AAR Corp (NYSE:AIR) a good hedge for your existing portfolios?
The entity has 309.9 M in debt with debt to equity (D/E) ratio of 0.34, which is OK given its current industry classification. The firm has a current ratio of 2.5, demonstrating that it is liquid and is capable to disburse its financial commitments when the payables are due.
Volatility is a rate at which the price of AAR Corp 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 AAR Corp may increase or decrease. In other words, similar to AAR Corp's beta indicator, it measures the risk of AAR Corp and helps estimate the fluctuations that may happen in a short period of time. So if prices of AAR Corp 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 AAR Corp's Liquidity

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

How AAR Corp utilizes its cash?

To perform a cash flow analysis of AAR Corp, investors first need to understand how to read the cash flow statement. A cash flow statement shows the amount of cash AAR Corp is receiving and how much cash it distributes out in a given period. The AAR Corp cash flow statement breaks down these inflows and outflows into different buckets, including operating activities, investing activities, and financing activities.
AAR Corp Net Cash Flow from Operations is relatively stable at the moment as compared to the past year. AAR Corp reported last year Net Cash Flow from Operations of (32.49 Million)

AAR Corp Volatility Drivers

AAR Corp unsystematic risk is unique to AAR Corp 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 AAR Corp you can also buy Ehang Holdings. You can also mitigate this risk by investing in the aerospace & defense 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 AAR Corp 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 AAR Corp income statement and balance sheet. Here are more details about AAR Corp volatility.
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