Americas Story

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CRMT -- USA Stock  

USD 86.44  1.15  1.31%

It appears Americas Car will continue to recover much faster as its share price surged up 1.85% today. Americas Car Mart's current daily volatility is 3.43 percent, with a beta of 0.02 and an alpha of 0.68 over DOW. As many baby boomers are still indifferent towards retail, it makes sense to review Americas Car Mart. I will address the reasons why this entity does not get much respect from private investors under the current market uncertainty.
Published over a month ago
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Is Americas Car (NASDAQ:CRMT) a good short term trade as volatility boosts?
Americas Car Mart currently holds roughly 59.56 M in cash with 20.92 M of positive cash flow from operations. This results in cash-per-share (CPS) ratio of 8.98. Macroaxis provides advice on Americas Car Mart to complement and cross-verify current analyst consensus on Americas Car Mart. Our investment recommendation engine determines the company's potential to grow exclusively from the perspective of an investor's current risk tolerance and investing horizon.
Investing in Americas Car, 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 Americas Car 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.

How important is Americas Car's Liquidity

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

How Americas utilizes its cash?

To perform a cash flow analysis of Americas Car, investors first need to understand how to read the cash flow statement. A cash flow statement shows the amount of cash Americas Car is receiving and how much cash it distributes out in a given period. The Americas Car cash flow statement breaks down these inflows and outflows into different buckets, including operating activities, investing activities, and financing activities. Americas Car Net Cash Flow from Operations is comparatively stable at the moment as compared to the past year. Americas Car reported Net Cash Flow from Operations of 20.92 Million in 2019

Americas Car Correlation with Peers

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

Breaking down the case for Americas Car

Americas Car appears to be very steady, given 1 month investment horizon. Americas Car Mart secures Sharpe Ratio (or Efficiency) of 0.17, which signifies that the company had 0.17% 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. By analyzing Americas Car Mart technical indicators you can presently evaluate if the expected return of 0.57% is justified by implied risk. Please makes use of Americas Car Mart risk adjusted performance of 0.3065, and Mean Deviation of 2.77 to double-check if our risk estimates are consistent with your expectations.
Click cells to compare fundamentals   Check Volatility   Backtest Portfolio

Americas technical analysis implies possible reversion

The mean deviation is down to 2.77 as of today. Americas Car Mart shows above-average downside volatility for the selected time horizon. We advise investors to inspect Americas Car Mart further and ensure that all market timing and asset allocation strategies are consistent with the estimation of Americas Car future alpha.

Our Final Takeaway

Whereas other companies under the auto & truck dealerships industry are still a bit expensive, Americas Car may offer a potential longer-term growth to private investors. While some private investors may not share our view we believe that the current risk-reward utility 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 Americas Car.

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 Raphi Shpitalnik do not own shares of Americas Car Mart. Please refer to our Terms of Use for any information regarding our disclosure principles.

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