Algoma Stock Story


USD 9.48  0.15  1.61%   

Today's short post will summarize Algoma Steel as your potential position. We will summarize the question of why stakeholders should continue to be confident in Algoma Steel outlook.
Published over two months ago
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Algoma Steel (NASDAQ:ASTL) is to drop even more in July

The company has a beta of 1.1223. Let's try to break down what Algoma's beta means in this case. The returns on MARKET and Algoma Steel are completely uncorrelated. The beta indicator helps investors understand whether Algoma Steel moves in the same direction as the rest of the market, and how volatile (i.e., risky) it is compared to the market (i.e., selected benchmark). In other words, if Algoma deviates very little from the market, it does not add much risk to the portfolio, but it also doesn't increase the expected returns.
There are currently many different techniques concerning forecasting the market as a whole as well as predicting future values of individual securities such as Algoma Steel Group. Regardless of method or technology, to accurately forecast the stock or bond market is more a matter of luck rather than a particular technique. Nevertheless, trying to predict the stock market accurately is still an essential part of the overall investment decision process. Using different forecasting techniques and comparing the results might improve your chances of accuracy even though unexpected events may often change the market sentiment and impact your forecasting results.

Predictive Modules for Algoma Steel

Sophisticated investors, who have witnessed many market ups and downs, frequently view the market will even out over time. This tendency of Algoma Steel'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. Please use the tools below to analyze the current value of Algoma Steel in the context of predictive analytics.
Please note, it is not enough to conduct a financial or market analysis of a single entity such as Algoma Steel. Your research has to be compared to or analyzed against Algoma Steel's peers to derive any actionable benefits. When done correctly, Algoma Steel's competitive analysis will give you plenty of quantitative and qualitative data to validate your investment decisions or develop an entirely new strategy towards taking a position in Algoma Steel Group.

How important is Algoma Steel's Liquidity

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

How does Algoma utilize its cash?

To perform a cash flow analysis of Algoma Steel, investors first need to understand how to read the cash flow statement. A cash flow statement shows the amount of cash Algoma Steel is receiving and how much cash it distributes out in a given period. The Algoma Steel cash flow statement breaks down these inflows and outflows into different buckets, including operating activities, investing activities, and financing activities.
Algoma Steel Net Cash Flow from Operations is relatively stable at the moment as compared to the past year. The company's current value of Net Cash Flow from Operations is estimated at 1.36 Billion

Detailed Perspective On Algoma Steel

Algoma Steel Group exhibits very low volatility with skewness of 0.42 and kurtosis of -0.8. However, we advise investors to further study Algoma Steel Group technical indicators to make sure all market info is available and is reliable. Understanding different market volatility trends often help investors to time the market. Properly using volatility indicators enable traders to measure Algoma Steel's stock risk against market volatility during both bullying and bearish trends. The higher level of volatility that comes with bear markets can directly impact Algoma Steel's stock price while adding stress to investors as they watch their shares' value plummet. This usually forces investors to rebalance their portfolios by buying different stocks as prices fall.

Algoma Steel Implied Volatility

Algoma Steel's implied volatility exposes the market's sentiment of Algoma Steel Group stock's possible movements over time. However, it does not forecast the overall direction of its price. In a nutshell, if Algoma Steel's implied volatility is high, the market thinks the stock has potential for high price swings in either direction. On the other hand, the low implied volatility suggests that Algoma Steel stock will not fluctuate a lot when Algoma Steel's options are near their expiration.

Returns Breakdown

Return on Assets(0.0437)
Return on Equity(0.31)
Return Capital(0.003884)
Return on Sales(0.004963)

Analysis of Algoma Steel Group

New kurtosis is at -0.8.
As of the 13th of June 2022, Algoma Steel shows the mean deviation of 2.55, and Risk Adjusted Performance of (0.10). Algoma Steel Group technical analysis gives you the methodology to make use of historical prices and volume patterns to determine a pattern that approximates the direction of the firm's future prices. Put another way, you can use this information to find out if the firm will indeed mirror its model of historical prices and volume momentum, or the prices will eventually revert. We were able to interpolate and analyze data for nineteen technical drivers for Algoma Steel Group, which can be compared to its rivals. Please confirm Algoma Steel Group variance, as well as the relationship between the value at risk and skewness to decide if Algoma Steel Group is priced correctly, providing market reflects its regular price of 8.6 per share. Given that Algoma Steel has jensen alpha of (0.15), we suggest you to validate Algoma Steel Group's prevailing market performance to make sure the company can sustain itself at a future point.

While some firms in the steel industry are either recovering or due for a correction, Algoma Steel may not be performing as strong as the other in terms of long-term growth potentials. With a relatively neutral outlook on the new economy, it is better to hold off any trading of Algoma as the current risk-reward utility is not appealing enough. 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 Algoma Steel.

Editorial Staff

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 Vlad Skutelnik do not own shares of Algoma Steel Group. Please refer to our Terms of Use for any information regarding our disclosure principles.

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