Allete Story

<div class='circular--portrait' style='background:#689CFD;color: #ffffff;font-size:3em;'>ALE</div>
ALE -- USA Stock  

USD 68.73  10.94  18.93%

Considering the 90-days investment horizon, Allete is expected to generate 1.09 times less return on investment than the market. In addition to that, the company is 3.38 times more volatile than its market benchmark. It trades about 0.02 of its total potential returns per unit of risk. The DOW is currently generating roughly 0.08 per unit of volatility. Although many risk-takers are getting more into utilities space, some of us are not very happy with Allete's current volatility. We will discuss how risky is to take a position in Allete at this time. The latest above-average Allete's volatility may impact the value of the stock as we project Allete as currently undervalued. The real value, according to our calculations, is approaching 62.47 per share.
Published over two weeks ago
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Will Allete (NYSE:ALE) latest volatility spike continue?
Allete Inc has roughly 25.7 M in cash with 298.8 M of positive cash flow from operations. This results in cash-per-share (CPS) ratio of 0.5.
Volatility is a rate at which the price of Allete 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 Allete may increase or decrease. In other words, similar to Allete's beta indicator, it measures the risk of Allete and helps estimate the fluctuations that may happen in a short period of time. So if prices of Allete 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 Allete's Liquidity

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

How Allete utilizes its cash?

To perform a cash flow analysis of Allete, investors first need to understand how to read the cash flow statement. A cash flow statement shows the amount of cash Allete is receiving and how much cash it distributes out in a given period. The Allete cash flow statement breaks down these inflows and outflows into different buckets, including operating activities, investing activities, and financing activities. Allete Net Cash Flow from Operations is projected to increase significantly based on the last few years of reporting. The past year's Net Cash Flow from Operations was at 249.5 Million

Allete Volatility Drivers

Allete unsystematic risk is unique to Allete Inc 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 Allete you can also buy Avista. You can also mitigate this risk by investing in the utilities?diversified 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 Allete 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 Allete income statement and balance sheet. Here are more details about Allete volatility.
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