Arch Coal Story

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ARCH -- USA Stock  

USD 33.22  1.40  4.04%

It seems as Arch Coal will continue to recover much faster as its share price surged up 2.52% today. The entity's current daily volatility is 3.6 percent, with a beta of 0.06 and an alpha of 0.42 over DOW. Whilst many millenniums are getting more into coal, it makes sense to concentrate on Arch Coal. We will evaluate if Arch Coal shares are reasonably priced going into November.
Published over a month ago
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Will the current Arch Coal volatility rise frighten stockholders?
Arch Coal currently holds roughly 217.26 M in cash with 219.73 M of positive cash flow from operations. This results in cash-per-share (CPS) ratio of 14.34. The company currently holds 379.85 M in liabilities with Debt to Equity (D/E) ratio of 0.69, which is about average as compared to similar companies. Arch Coal has a current ratio of 2.02, suggesting that it is liquid enough and is able to pay its financial obligations when due.
Investing in Arch Coal, 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 Arch Coal 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.

How important is Arch Coal's Liquidity

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

How Arch Coal utilizes its cash?

To perform a cash flow analysis of Arch Coal, investors first need to understand how to read the cash flow statement. A cash flow statement shows the amount of cash Arch Coal is receiving and how much cash it distributes out in a given period. The Arch Coal cash flow statement breaks down these inflows and outflows into different buckets, including operating activities, investing activities, and financing activities. Arch Coal Net Cash Flow from Operations is most likely to increase significantly in the upcoming years. The last year's value of Net Cash Flow from Operations was reported at 419.71 Million

Arch Coal Correlation with Peers

Investors in Arch Coal can reduce exposure to individual asset risk by holding a diversified portfolio of assets in addition to a long position in Arch Coal. Diversification will allow for the same portfolio return with reduced risk. The correlation table of Arch Coal and its peers is a two-dimensional matrix that shows the correlation coefficient between pairs of securities Arch Coal 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 Arch Coal for more details

Breaking down Arch Coal Indicators

Arch Coal appears to be very steady, given 1 month investment horizon. Arch Coal secures Sharpe Ratio (or Efficiency) of 0.0907, which signifies that the company had 0.0907% 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-eight technical indicators for Arch Coal, which you can use to evaluate future volatility of the firm. Please makes use of Arch Coal mean deviation of 2.83, and Risk Adjusted Performance of 0.1252 to double-check if our risk estimates are consistent with your expectations.
Click cells to compare fundamentals   Check Volatility   Backtest Portfolio

Will Arch Coal current rise continue?

Skewness is down to 0.31. It may hint to a possible volatility drop. Arch Coal currently demonstrates below-verage downside deviation. It has Information Ratio of 0.1 and Jensen Alpha of 0.42. However, we do advice investors to further question Arch Coal expected returns to ensure all indicators are consistent with the current outlook about its relatively low value at risk.

The Bottom Line

While many of the other players within the thermal coal industry are still a little expensive, even after the recent corrections, Arch Coal may offer a potential longer-term growth to stockholders. With an impartial outlook on the current market volatility, it may be better to hold off any inventment activity and neither purchase nor trade any shares of Arch Coal at this time. The Arch Coal 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 Arch Coal.

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 Achuva Shats do not own shares of Arch Coal. Please refer to our Terms of Use for any information regarding our disclosure principles.

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