Is Guaranty Federal stock way too aggressive for baby boomers?

It looks as if Guaranty Federal may not recover as fast as we have hopped for as its price went down 4.61% today. The company's current daily volatility is 3.42 percent, with a beta of -0.19 and an alpha of 0.16 over DOW. While many traders are getting carried away by overanalyzing market volatility, it is reasonable to digest Guaranty Federal Bancshares based on how it reacts to the latest economic swings. We will evaluate if Guaranty Federal shares are reasonably priced going into August.
Published over a year ago
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Reviewed by Gabriel Shpitalnik

Guaranty Federal Bancshares currently holds roughly 87.88 M in cash with 13.05 M of positive cash flow from operations. This results in cash-per-share (CPS) ratio of 20.13, which can makes it an attractive takeover target, given it will continue generating positive cash flow.

How important is Guaranty Federal's Liquidity

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

What is driving Guaranty Federal Investor Appetite?

We consider Guaranty Federal somewhat reliable. Guaranty Federal Ban holds Efficiency (Sharpe) Ratio of 0.0255, which attests that the entity had 0.0255% of return per unit of standard deviation over the last month. Our philosophy in determining the volatility of a stock is to use all available market data together with stock specific technical indicators that cannot be diversified away. We have found twenty-one technical indicators for Guaranty Federal Ban, which you can use to evaluate future volatility of the firm. Please check out Guaranty Federal risk adjusted performance of 0.074, and Market Risk Adjusted Performance of (0.65) to validate if the risk estimate we provide is consistent with the expected return of 0.087%.
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Guaranty Federal is getting out of control

Latest skewness is at 0.76. Guaranty Federal Bancshares shows above-average downside volatility for the selected time horizon. We advise investors to inspect Guaranty Federal Bancshares further and ensure that all market timing and asset allocation strategies are consistent with the estimation of Guaranty Federal future alpha.

Our Takeaway on Guaranty Federal Investment

Although other entities under the banks—regional industry are still a bit expensive, Guaranty Federal may offer a potential longer-term growth to shareholders. With a less-than optimistic outlook for your 30 days horizon, it may be a good time to drop some or all of your Guaranty Federal holdings as it seems the potential growth was already fully factored into the current price. 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 Guaranty Federal.

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Editorial Staff

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 Rifka Kats do not own shares of Guaranty Federal Bancshares. Please refer to our Terms of Use for any information regarding our disclosure principles.

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