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Should you buy First after the latest volatility dip?
 | By Raphi Shpitalnik | Macroaxis Story |
It looks as if First may not have a good chance to recover from the latest dip as its shares fell again. First's current daily volatility is 4.48 percent, with a beta of 2.14 and an alpha of -0.43 over DOW. While some millenniums are indifferent towards current market swings, it makes sense to digest First based on its technical indicators. We will look into some reasons why it is still possible for First to maintain above-average margins while minimizing volatility.
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Reviewed by Rifka Kats
First has roughly 191.85 M in cash with 122.06 M of positive cash flow from operations. This results in cash-per-share (CPS) ratio of 1.96. The firm shows a Beta (market volatility) of 2.1397, which means a somewhat significant risk relative to the market. Let's try to break down what First's beta means in this case. As the market goes up, the company is expected to outperform it. However, if the market returns are negative, First will likely underperform. Even though it is essential to pay attention to First historical returns, it is always good to be careful when utilizing equity current trending patterns. Our philosophy towards predicting any stock's future performance is to check both, its past performance charts as well as the business as a whole, including all available technical indicators. First exposes twenty-seven different technical indicators, which can help you to evaluate its performance. First has an expected return of -0.2724%. Please be advised to confirm First treynor ratio, expected short fall, day median price, as well as the relationship between the potential upside and accumulation distribution to decide if First stock performance from the past will be repeated at some point in the near future.
Please note, it is not enough to conduct a financial or market analysis of a single entity such as First Commonwealth. Your research has to be compared to or analyzed against First Commonwealth's peers to derive any actionable benefits. When done correctly, First Commonwealth'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 First Commonwealth.
Investing in First Commonwealth, 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 First Commonwealth 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 First Commonwealth'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 First Commonwealth's Liquidity
First Commonwealth financial leverage refers to using borrowed capital as a funding source to finance First Commonwealth Financial ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. First Commonwealth 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 First Commonwealth'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 First Commonwealth'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 First Commonwealth's total debt and its cash.
First Commonwealth Gross Profit
First Commonwealth Gross Profit growth is one of the most critical measures in evaluating the company. The Gross Profit growth rate is calculated simply by comparing First Commonwealth 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 First Commonwealth Gross Profit growth over the last 10 years. Please check First Commonwealth's gross profit and other fundamental indicators for more details.
First Commonwealth Correlation with Peers
Investors in First can reduce exposure to individual asset risk by holding a diversified portfolio of assets in addition to a long position in First Commonwealth Financial. Diversification will allow for the same portfolio return with reduced risk. The correlation table of First Commonwealth and its peers is a two-dimensional matrix that shows the correlation coefficient between pairs of securities First 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 First for more details
Is First Commonwealth valued objectively by the market?
First secures Sharpe Ratio (or Efficiency) of -0.0608, which denotes the company had -0.0608% of return per unit of risk over the last month. Macroaxis standpoint towards predicting the risk of any stock is to look at both systematic and unsystematic factors of the business, including all available market data and technical indicators. First exposes twenty-seven different technical indicators, which can help you to evaluate volatility that cannot be diversified away. Please be advised to confirm First coefficient of variation of (5,856), and Mean Deviation of 3.6 to check the risk estimate we provide.
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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 Raphi Shpitalnik do not own shares of First Commonwealth Financial. Please refer to our Terms of Use for any information regarding our disclosure principles.