Advansix Story

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ASIX -- USA Stock  

USD 27.75  0.99  3.44%

It looks like FutureFuel Corp will continue to recover much faster as its share price surged up 3.69% today to Advansix's 7.2208%. While some baby boomers are getting worried about basic materials space, we are going to break down both, Advansix and FutureFuel Corp as potential short-term investments. We are going to inspect some of the competitive aspects of both Advansix and FutureFuel.
Published few days ago
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Should I short all of FutureFuel and Advansix?
By analyzing existing basic indicators between Advansix and FutureFuel, you can compare the effects of market volatilities on both companies' prices and check if they can diversify away market risk if combined in one of your portfolios. You can also utilize pair trading strategies for matching a long position in FutureFuel with a short position in Advansix. Check out our pair correlation module for more information.

Let's begin by analyzing the assets. The asset utilization indicator refers to the revenue earned for every dollar of assets a company currently reports. Advansix has an asset utilization ratio of 135.56 percent. This suggests that the company is making $1.36 for each dollar of assets. An increasing asset utilization means that Advansix is more efficient with each dollar of assets it utilizes for everyday operations.
Out of tens of thousands of stocks, funds, and ETFs that trade on global exchanges each represent an individual company which you can analyze using comparative analysis. To determine which one of the two companies, such as Advansix or FutureFuel is a better fit for your portfolio, analyzing a few basic fundamental indicators is a good first step.

How important is Advansix's Liquidity

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

Correlation Between Advansix and FutureFuel Corp

In general, stock analysis is a method for investors and traders to make individual buying and selling decisions. Stock correlation analysis is also essential because it can help investors realize that they may not be as diversified as they think. Risk management strategies are usually required to make sure all portfolios are properly aligned against their risk tolerance level. You can consider holding Advansix together with similar or unrelated positions with a negative correlation. For example, you can also add FutureFuel Corp to your portfolio. If FutureFuel Corp is not perfectly correlated to Advansix it will diversify some of the market risks out of the positively correlated stocks in your portfolio. However, the disadvantage of this sort of hedging is that it can potentially affect your investment returns throughout market cycles. When Advansix for example, for example, performs excellent and delivers stable returns, the negatively correlated position you locked in as a hedge may drag your returns down.
Please check pair correlation details between ASIX and FF for more information.

Note

Are you currently holding both Advansix and FutureFuel Corp in your portfolio?
Please note if you are using this as a pair-trade strategy between Advansix and FutureFuel Corp, watch out for correlation discrepancy over time. Relying on the historical price correlations and assuming that it will not change may lead to short-term losses.

Sale by Christopher Gramm of 200 shares of Advansix

Legal trades by Advansix 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:
Advansix insider trading alert for sale of common stock par value $0.01 by Christopher Gramm, Controller, on 16th of February 2021. This event was filed by Advansix Inc with SEC on 2021-02-16. 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 it down a bit more

Revenue is income that a firm generates from business activities such us rendering services or selling goods to customers. It is a crucial part of a business and an essential item when evaluating a company's financial statements. Revenues from a firm's primary business operations can be reported on the income statement as sales revenue, net sales, or simply sales, depending on the industry in which a given company operates.
Revenue is typically recorded when cash or cash equivalents are exchanged for services or goods and can include product or services discounts, promotions, as well as early payments on invoices or services rendered in advance.

Revenue Breakdown

Lets now take a look at Advansix revenue. Based on the latest financial disclosure, Advansix reported 1.14 B of revenue. This is 85.49% lower than that of the Basic Materials sector and 87.43% lower than that of the Chemicals industry. The revenue for all United States stocks is 87.92% higher than that of Advansix. As for FutureFuel Corp we see revenue of 174.82 M, which is 98.07% lower than that of the Chemicals

Sector
7.9 B
ASIX1.14 Billion12.43
Sector7.86 Billion85.67
FF174.82 Million1.91

Will Advansix current rise continue?

Current total risk alpha is at 0.25. Advansix currently demonstrates below-verage downside deviation. It has Information Ratio of 0.19 and Jensen Alpha of 0.46. However, we do advice investors to further question Advansix 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 chemicals industry are still a little expensive, even after the recent corrections, Advansix may offer a potential longer-term growth to investors. While some investors may not share our view we believe it may be a good time to exit Advansix as the risk-reward trade off is not appealing enough to hold a position. 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 Advansix.

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 Gabriel Shpitalnik do not own shares of Advansix. Please refer to our Terms of Use for any information regarding our disclosure principles.

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