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What does a recent Eagle Materials volatility decline mean for insiders?
 | By Gabriel Shpitalnik | Macroaxis Story |
It appears that Eagle Materials will continue to recover much faster as its share price surged up 2.23% today. The company's current daily volatility is 3.98 percent, with a beta of 1.84 and an alpha of 0.4 over DOW. As many millenniums are trying to avoid construction materials, it makes sense to recap Eagle Materials a little further and try to understand its current market patterns. We will analyze why Eagle Materials investors may still consider a stake in the business.
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Reviewed by Michael Smolkin
Eagle Materials has roughly 118.65 M in cash with 399.3 M of positive cash flow from operations. This results in cash-per-share (CPS) ratio of 2.85. Macroaxis provides advice on Eagle Materials to complement and cross-verify current analyst consensus on Eagle Materials. 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.
Please note, it is not enough to conduct a financial or market analysis of a single entity such as Eagle Materials. Your research has to be compared to or analyzed against Eagle Materials' peers to derive any actionable benefits. When done correctly, Eagle Materials' 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 Eagle Materials.
Investing in Eagle Materials, 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 Eagle Materials 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 Eagle Materials' 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 Eagle Materials's Liquidity
Eagle Materials financial leverage refers to using borrowed capital as a funding source to finance Eagle Materials ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. Eagle Materials 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 Eagle Materials' 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 Eagle Materials' 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 Eagle Materials's total debt and its cash.
Eagle Materials Gross Profit
Eagle Materials Gross Profit growth is one of the most critical measures in evaluating the company. The Gross Profit growth rate is calculated simply by comparing Eagle Materials 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 Eagle Materials Gross Profit growth over the last 10 years. Please check Eagle Materials' gross profit and other fundamental indicators for more details.
Eagle Materials Correlation with Peers
Investors in Eagle can reduce exposure to individual asset risk by holding a diversified portfolio of assets in addition to a long position in Eagle Materials. Diversification will allow for the same portfolio return with reduced risk. The correlation table of Eagle Materials and its peers is a two-dimensional matrix that shows the correlation coefficient between pairs of securities Eagle 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 Eagle for more details
Details
Eagle Materials appears to be very steady, given 1 month investment horizon. Eagle Materials secures Sharpe Ratio (or Efficiency) of 0.15, which denotes the company had 0.15% of return per unit of risk over the last month. Our standpoint towards predicting the volatility of a stock is to use all available market data together with stock specific technical indicators that cannot be diversified away. By reviewing Eagle Materials technical indicators you can presently evaluate if the expected return of 0.59% is justified by implied risk. Please utilize Eagle Materials Downside Deviation of 4.24, mean deviation of 2.97, and Coefficient Of Variation of 580.95 to check if our risk estimates are consistent with your expectations.
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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 Gabriel Shpitalnik do not own shares of Eagle Materials. Please refer to our Terms of Use for any information regarding our disclosure principles.