Should I still rely on CVB Financial management in March 2020?
 | By Vlad Skutelnik | Macroaxis Story |
CVB Financial Calculated Tax Rate is expected to slightly decrease based on the last few years of reporting. The last year Calculated Tax Rate was at 25.20. The current year PPandE Turnover is expected to grow to 9.43, whereas Average Assets are expected to decline to about 10.2 B. Next fiscal quarter end is expected on March 31, 2020. While many traders are getting carried away by overanalyzing Banking, it is reasonable to digest CVB Financial Corporation. I will look into why we are still optimistic in anticipation of a recovery. The company Piotroski F Score is 6 - Healthy. Given the investment horizon of 30 days, CVB Financial is expected to generate 47.8 times less return on investment than the market. But when comparing it to its historical volatility, the company is 1.04 times less risky than the market. It trades about 0.0 of its potential returns per unit of risk. The market is currently generating roughly 0.05 of returns per unit of risk over similar time horizon. CVB Financial owns latest Real Value of $21.52 per share. The recent price of the firm is $21.41. At this time the firm appears to be fairly valued. This module approximates value of CVB Financial from inspecting the firm fundamentals such as Return On Asset of 0.0182 and Shares Outstanding of 140.11 M as well as reviewing its technical indicators and Probability Of Bankruptcy. In general, we favor to invest in undervalued equities and to trade away overvalued equities since in the future instruments prices and their ongoing real values will grow together.
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Reviewed by Raphi Shpitalnik
CVB FINANCIAL COR currently holds roughly 188.45 M in cash with 182.65 M of positive cash flow from operations. This results in cash-per-share (CPS) ratio of 1.35. This firm dividends can provide a clue to current valuation of the stock. CVB Financial one year expected dividend income is about $0.31 per share. The company has Profit Margin (PM) of 0.43 % which maeans that even a very small decline in it revenue will erase profits resulting in a net loss. This is way below average. Similarly, it shows Operating Margin (OM) of 62.51 % which suggests for every 100 dollars of sales it generated a net operating income of 0.63.
Please note, it is not enough to conduct a financial or market analysis of a single entity such as CVB Financial. Your research has to be compared to or analyzed against CVB Financial's peers to derive any actionable benefits. When done correctly, CVB Financial's competitive analysis will give you plenty of quantitative and qualitative data to validate your investment decisions or develop an entirely new strategy toward taking a position in CVB Financial.
Investing in CVB Financial, 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 CVB Financial 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, anticipate that the market will even out over time. This tendency of CVB Financial'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.
How important is CVB Financial's Liquidity
CVB Financial financial leverage refers to using borrowed capital as a funding source to finance CVB Financial ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. CVB Financial 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 CVB Financial's 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 CVB Financial's 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 CVB Financial's total debt and its cash.
CVB Financial Gross Profit
CVB Financial Gross Profit growth is one of the most critical measures in evaluating the company. The Gross Profit growth rate is calculated simply by comparing CVB Financial previous period's values with its current period's values. Each time period you're measuring should be of equal lengths the increase or decrease, in a company's Gross Profit between two periods. Here we show CVB Financial Gross Profit growth over the last 10 years. Please check CVB Financial's gross profit and other fundamental indicators for more details.
CVB Financial Correlation with Peers
Investors in CVB can reduce exposure to individual asset risk by holding a diversified portfolio of assets in addition to a long position in CVB Financial. Diversification will allow for the same portfolio return with reduced risk. The correlation table of CVB Financial and its peers is a two-dimensional matrix that shows the correlation coefficient between pairs of securities CVB 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 CVB for more details
Breaking down CVB Financial Further
The current investor indifference towards the small price fluctuations of CVB Financial Corporation could raise concerns from investors as the firm closed today at a share price of 21.36 on very low momentum in volume. The company directors and management did not add any value to CVB Financial investors in January. However, most investors can still diversify their portfolios with CVB Financial Corporation to hedge your portfolio against high-volatility market scenarios. The stock standard deviation of daily returns for 30 days (very short) investing horizon is currently 0.9066. The very small Stock volatility is a good signal to investors with longer term investment horizons. CVB Financial is trading at 21.41. This is 1.34% down. Opened at 21.41. CVB Financial Earnings Before Interest Taxes and Depreciation Amortization USD is increasing over the last 8 years. Moreover, CVB Financial Earnings Before Interest Taxes and Depreciation Amortization EBITDA is increasing over the last 8 years. The previous year value of CVB Financial Earnings Before Interest Taxes and Depreciation Amortization EBITDA was 115,489,982. CVB Financial Corp. operates as a bank holding company for Citizens Business Bank that provides banking and financial products and services. CVB Financial Corp. was founded in 1974 and is headquartered in Ontario, California. CVB Financial operates under BanksRegional classification in USA and is traded on BATS Exchange.To conclude, our present buy-hold-sell recommendation on the firm is Strong Hold. We believe CVB Financial is fairly valued with low odds of distress for the next two years.
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