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What does a latest Abercrombie Fitch volatility dip mean for shareholders?
 | By Vlad Skutelnik | Macroaxis Story |
It looks as if Abercrombie Fitch will continue to recover much faster as its share price surged up 2.68% today. Abercrombie Fitch's current daily volatility is 4.15 percent, with a beta of 1.78 and an alpha of -0.32 over DOW. While some baby boomers are getting worried about elevated trading volume, it is reasonable to digest Abercrombie Fitch. We will look into some reasons why it is still possible for Abercrombie Fitch to maintain above-average margins while minimizing volatility.
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Reviewed by Michael Smolkin
Abercrombie Fitch has roughly 703.99 M in cash with 281.22 M of positive cash flow from operations. This results in cash-per-share (CPS) ratio of 11.29, which can makes it an attractive takeover target, given it will continue generating positive cash flow.
Please note, it is not enough to conduct a financial or market analysis of a single entity such as Abercrombie Fitch. Your research has to be compared to or analyzed against Abercrombie Fitch's peers to derive any actionable benefits. When done correctly, Abercrombie Fitch's competitive analysis will give you plenty of quantitative and qualitative data to validate your investment decisions or develop an entirely new strategy toward taking a position in Abercrombie Fitch.
Investing in Abercrombie Fitch, 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 Abercrombie Fitch 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.
Sophisticated investors, who have witnessed many market ups and downs, anticipate that the market will even out over time. This tendency of Abercrombie Fitch's price to converge to an average value over time is called mean reversion. However, historically, high market prices usually discourage investors that believe in mean reversion to invest, while low prices are viewed as an opportunity to buy.
How important is Abercrombie Fitch's Liquidity
Abercrombie Fitch financial leverage refers to using borrowed capital as a funding source to finance Abercrombie Fitch ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. Abercrombie Fitch 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. Financial leverage can amplify the potential profits to Abercrombie Fitch's owners, but it also increases the potential losses and risk of financial distress, including bankruptcy, if the firm cannot cover its debt costs. The degree of Abercrombie Fitch's financial leverage can be measured in several ways, including by ratios such as the debt-to-equity ratio (total debt / total equity), equity multiplier (total assets / total equity), or the debt ratio (total debt / total assets). Please check the breakdown between Abercrombie Fitch's total debt and its cash.
Abercrombie Fitch Gross Profit
Abercrombie Fitch Gross Profit growth is one of the most critical measures in evaluating the company. The Gross Profit growth rate is calculated simply by comparing Abercrombie Fitch previous period's values with its current period's values. Each time period you're measuring should be of equal lengths the increase or decrease, in a company's Gross Profit between two periods. Here we show Abercrombie Fitch Gross Profit growth over the last 10 years. Please check Abercrombie Fitch's gross profit and other fundamental indicators for more details.
Abercrombie Fitch Correlation with Peers
Investors in Abercrombie can reduce exposure to individual asset risk by holding a diversified portfolio of assets in addition to a long position in Abercrombie Fitch. Diversification will allow for the same portfolio return with reduced risk. The correlation table of Abercrombie Fitch and its peers is a two-dimensional matrix that shows the correlation coefficient between pairs of securities Abercrombie 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 Abercrombie for more details
Breaking it down a bit more
We consider Abercrombie Fitch somewhat reliable. Abercrombie Fitch secures Sharpe Ratio (or Efficiency) of 0.0043, which signifies that the company had 0.0043% of return per unit of standard deviation over the last month. Our philosophy in foreseeing the volatility of a stock is to use all available market data together with stock specific technical indicators that cannot be diversified away. We have found twenty-seven technical indicators for Abercrombie Fitch, which you can use to evaluate future volatility of the firm. Please confirm Abercrombie Fitch mean deviation of 3.46, and Risk Adjusted Performance of (0.004059) to double-check if the risk estimate we provide is consistent with the expected return of 0.0179%.
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