2018 | 2019 | 2020 | 2021 (projected) | PPandE Turnover | 5.34 | 5.19 | 4.67 | 4.1 | Calculated Tax Rate | 20.72 | 18.12 | 16.31 | 18.45 |
Will Berkshire Hills (NYSE:BHLB) current volatility spike continue?
By Vlad Skutelnik | Macroaxis Story |
Given the investment horizon of 60 days Berkshire Hills is expected to generate 4.66 times more return on investment than the market. However, the company is 4.66 times more volatile than its market benchmark. It trades about 0.19 of its potential returns per unit of risk. The DOW is currently generating roughly 0.19 per unit of risk. As many adventurous traders are excited about financial services space, it is only fair to go over the risk of shorting Berkshire Hills Bancorp based on its current volatility spike. We will go over odds for Berkshire Hills to generate above-average margins in two-three weeks. The current above-average Berkshire Hills' volatility may impact the value of the stock as we project Berkshire Hills as currently overvalued. The real value, according to our calculations, is approaching 15.75 per share.
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Reviewed by Michael Smolkin
The company currently holds 789.4 M in liabilities with Debt to Equity (D/E) ratio of 0.11, which may suggest Berkshire Hills is not taking enough advantage from borrowing. Volatility is a rate at which the price of Berkshire Hills or any other equity instrument increases or decreases for a given set of returns. It is measured by calculating the standard deviation of the annualized returns over a given period of time and shows the range to which the price of Berkshire Hills may increase or decrease. In other words, similar to Berkshire's beta indicator, it measures the risk of Berkshire Hills and helps estimate the fluctuations that may happen in a short period of time. So if prices of Berkshire Hills fluctuate rapidly in a short time span, it is termed to have high volatility, and if it swings slowly in a more extended period, it is understood to have low volatility. Please read more on our technical analysis page.
How important is Berkshire Hills's Liquidity
Berkshire Hills financial leverage refers to using borrowed capital as a funding source to finance Berkshire Hills Bancorp ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. Berkshire Hills 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 Berkshire Hills' 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 Berkshire Hills' 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 Berkshire Hills's total debt and its cash.
An Additional Perspective On Berkshire Hills Bancorp
The current price rise of Berkshire Hills Bancorp could raise concerns from investors as the firm it trading at a share price of 19.26 on 287,900 in volume. The company executives may have good odds in positioning the firm resources to exploit market volatility in February. The stock standard deviation of daily returns for 30 days investing horizon is currently 4.47. This high volatility is attributed to the latest market swings and not so good earnings reports for some of the Berkshire Hills partners.
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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 Berkshire Hills Bancorp. Please refer to our Terms of Use for any information regarding our disclosure principles.