AWK American stock Story

AWK -  USA Stock  

USD 157.54  4.66  2.87%

It feels like American Water will continue to recover much faster as its share price surged up 1.65% today. American Water Works's current daily volatility is 1.26 percent, with a beta of -0.19 and an alpha of 0.08 over DOW. As many millenniums are trying to avoid utilities, it makes sense to examine American Water Works a little further and try to understand its current market patterns. We will evaluate why we are still optimistic in anticipation of a recovery.
Published over six months ago
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Is American Water (NYSE:AWK) way too risky for millennials?
American Water Works has roughly 583 M in cash with 1.43 B of positive cash flow from operations. This results in cash-per-share (CPS) ratio of 3.22. This firm has 10.68 B in debt with debt to equity (D/E) ratio of 1.68, which is OK given its current industry classification. The company has a current ratio of 0.88, suggesting that it has not enough short term capital to pay financial commitments when the payables are due.
Investing in American Water, 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 American Water 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, frequently view the market will even out over time. This tendency of American Water'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 American Water 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 American Water. Your research has to be compared to or analyzed against American Water's peers to derive any actionable benefits. When done correctly, American Water'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 American Water Works.

How important is American Water's Liquidity

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

What do experts say?

Stock analysis is a method for investors and traders to make buying and selling decisions. By studying and evaluating past and current data, investors and traders attempt to gain an edge in the markets by making informed decisions.
It is good to see analyst projects for American Water, but it might be worth checking our own buy vs. sell analysis

American Water Correlation with Peers

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

Another Outlook On American Water

We consider American Water very steady. American Water Works secures Sharpe Ratio (or Efficiency) of 0.0349, which signifies that the company had 0.0349% 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-one technical indicators for American Water Works, which you can use to evaluate future volatility of the firm. Please confirm American Water Works risk adjusted performance of 0.0762, and Mean Deviation of 0.9278 to double-check if the risk estimate we provide is consistent with the expected return of 0.0441%.
Click cells to compare fundamentals   Check Volatility   Backtest Portfolio

American is expecting lower volatility in December

Recent value at risk indicator falls down to -1.7. Possible price growth? American Water Works has relatively low volatility with skewness of -0.36 and kurtosis of 1.77. However, we advise all investors to independently investigate American Water Works to ensure all accessible information is consistent with the expectations about its upside potential and future expected returns.

Our Final Take On American Water

Although some firms within the utilities—regulated water industry are still a little expensive, even after the recent corrections, American Water may offer a potential longer-term growth to traders. With an impartial outlook on the current market volatility, it may be better to hold off any inventment activity and neither pick up nor drop any shares of American Water at this time. The American Water Works 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 Water.

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 American Water Works. Please refer to our Terms of Use for any information regarding our disclosure principles.

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