Capstead Story

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CMO -- USA Stock  

USD 5.83  0.14  2.35%

Capstead Mortgage is scheduled to announce its earnings tomorrow. The upcoming quarterly report is expected on the 27th of January 2021. Capstead Mortgage Invested Capital is quite stable at the moment as compared to the past year. The company's current value of Invested Capital is estimated at 27.36 Billion. Invested Capital Average is expected to rise to about 27.8 B this year, although the value of Net Income Per Employee will most likely fall to (3 M). While some millenniums are indifferent towards real estate space, it makes sense to outline Capstead Mortgage as a unique investment alternative.
Published over a month ago
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Is Capstead Mortgage (NYSE:CMO) outlook still optimistic based on the latest debt level?
Capstead Mortgage has 7.79 B in debt with debt to equity (D/E) ratio of 8.52, demonstrating that Capstead Mortgage may be unable to create cash to meet all of its financial commitments. Capstead Mortgage has performance score of 2 on a scale of 0 to 100. The firm shows a Beta (market volatility) of -0.2081, which signifies not very significant fluctuations relative to the market. Let's try to break down what Capstead's beta means in this case. As returns on the market increase, returns on owning Capstead Mortgage are expected to decrease at a much lower rate. During the bear market, Capstead Mortgage is likely to outperform the market. Although it is extremely important to respect Capstead Mortgage historical returns, it is better to be realistic regarding the information on equity current trending patterns. The philosophy towards foreseeing future performance of any stock is to evaluate the business as a whole together with its past performance, including all available fundamental and technical indicators. By analyzing Capstead Mortgage technical indicators, you can presently evaluate if the expected return of 0.0874% will be sustainable into the future. Capstead Mortgage right now shows a risk of 2.16%. Please confirm Capstead Mortgage treynor ratio, as well as the relationship between the semi variance and daily balance of power to decide if Capstead Mortgage will be following its price patterns.
Capstead Mortgage financial leverage ratio helps determine the effect of debt on the overall profitability of the company. It measures the total debt position of Capstead Mortgage, including all of Capstead Mortgage's outstanding debt obligations, and compares it with the equity. In simple terms, the high financial leverage means the cost of production, together with running the business day-to-day, is high, whereas, lower financial leverage implies lower fixed cost investment in the business and generally considered by investors to be a good sign. So if creditors own a majority of Capstead Mortgage assets, the company is considered highly leveraged. Understanding the composition and structure of overall Capstead Mortgage debt and outstanding corporate bonds gives a good idea of how risky the capital structure of a business is and if it is worth investing in it.
Please read more on our technical analysis page.

Understanding Capstead Total Debt

Capstead Mortgage Corp liabilities are broken down into two parts on the balance sheet. These are short-term (or current) obligations and long-term debt. Capstead Mortgage Corp has to fulfill its short-term liabilities in this reporting year and should be no more than 12 months old. Long-term debt, on the other hand, is anything beyond the 12-month payment timeframe. Common short-term liabilities found on Capstead Mortgage balance sheet include debt obligations and money owed to different Capstead Mortgage vendors, workers, and loan providers. Below is the chart of Capstead main long-term debt accounts currently reported on its balance sheet.
You can use Capstead Mortgage Corp financial leverage analysis tool to get a better grip on understanding its financial position

How important is Capstead Mortgage's Liquidity

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

Exercise or conversion by Roy Kim of 41860 shares of Capstead Mortgage subject to Rule 16b-3

Legal trades by Capstead Mortgage 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:
Capstead insider trading alert for exercise of restricted stock units by Roy Kim, Senior Vice President, on 1st of March 2021. This event was filed by Capstead Mortgage Corp with SEC on 2021-03-01. Statement of changes in beneficial ownership - SEC Form 4. Roy Kim currently serves as senior vice president treasurer of Capstead Mortgage Corp [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

Reported Net Loss for the year was (139.7 M) with loss before taxes, overhead, and interest of (22.5 M).
 2018 2019 2020 2021 (projected)
Share Based Compensation1.78 M2.72 M2.45 M2.3 M
Net Cash Flow from Operations164.76 M154.27 M138.84 M165.47 M

Analysis of Capstead Mortgage

Latest Sortino Ratio is up to -0.09. Price may slide again. As of the 26th of January, Capstead Mortgage shows the Risk Adjusted Performance of 0.0402, downside deviation of 1.91, and Mean Deviation of 1.58. Capstead Mortgage 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 Capstead Mortgage, which can be compared to its rivals. Please confirm Capstead Mortgage coefficient of variation, treynor ratio, as well as the relationship between the Treynor Ratio and semi variance to decide if Capstead Mortgage is priced correctly, providing market reflects its regular price of 5.68 per share. Given that Capstead Mortgage has jensen alpha of 0.127, we suggest you to validate Capstead Mortgage's prevailing market performance to make sure the company can sustain itself at a future point.

Our Conclusion on Capstead Mortgage

Whereas other entities under the reit?mortgage industry are still a bit expensive, Capstead Mortgage may offer a potential longer-term growth to institutional investors. With a relatively neutral outlook on the latest economy, it is better to hold off any trading of Capstead 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 Capstead Mortgage.

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 Capstead Mortgage Corp. Please refer to our Terms of Use for any information regarding our disclosure principles.

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