American Story

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Given the investment horizon of 90 days, American National is expected to generate 4.06 times less return on investment than the market. In addition to that, the company is 2.38 times more volatile than its market benchmark. It trades about 0.01 of its total potential returns per unit of risk. The DOW is currently generating roughly 0.11 per unit of volatility. As many old-fashioned traders are trying to avoid financial services space, it makes sense to go over American National Bankshares a little further and try to understand its current volatility patterns. We will analyze how risky is to take a position in American National at this time. American National's low volatility may still impact the value of the stock as we estimate it as currently fairly valued. The real value, based on our analysis, is getting close to 23.35 per share.
Published over a month ago
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Is that a good time to trade American National (NASDAQ:AMNB)?
American National Bankshares currently holds roughly 251.6 M in cash with 34.95 M of positive cash flow from operations. This results in cash-per-share (CPS) ratio of 22.95, which can makes it an attractive takeover target, given it will continue generating positive cash flow.

How important is American National's Liquidity

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

How American utilizes its cash?

To perform a cash flow analysis of American National, investors first need to understand how to read the cash flow statement. A cash flow statement shows the amount of cash American National is receiving and how much cash it distributes out in a given period. The American National cash flow statement breaks down these inflows and outflows into different buckets, including operating activities, investing activities, and financing activities. American National 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 32.68 Million

Acquisition or disposition of American National securities by Ronda Penn

Legal trades by American National 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:
American insider trading alert for acquisition or disposition of american national bankshares inc. by Ronda Penn, the corporate stakeholder, on 18th of November 2020. This event was filed by American National Banksha with SEC on 2020-11-18. Statement of changes in beneficial ownership - SEC Form 4 [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.

Breaking down the case for American National

American National reported the previous year's revenue of 91.45 M. Net Income was 30.16 M with profit before overhead, payroll, taxes, and interest of 91.84 M.
 2017 2018 2019 2020 (projected)
Share Based Compensation1.02 M1.2 M1.54 M1.24 M
Net Cash Flow from Operations25.75 M27.5 M32.68 M28.45 M

American National is epected to finish above $22 in November

The coefficient of variation is down to -3042.2 as of today. American National Bankshares exhibits very low volatility with skewness of 0.07 and kurtosis of 0.39. However, we advise investors to further study American National Bankshares technical indicators to make sure all market info is available and is reliable.

The Bottom Line

Whereas some other firms in the banks?regional industry are either recovering or due for a correction, American may not be as strong as the others in terms of longer-term growth potentials. With an impartial outlook on the current market volatility, it may be better to hold off any inventment activity and neither trade nor exit any shares of American National at this time. The American National Bankshares risk-reward trade off is not appealing enough to do any trading. 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 American National.

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 Ellen Johnson do not own shares of American National Bankshares. Please refer to our Terms of Use for any information regarding our disclosure principles.

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