Guaranty Story

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GFED -- USA Stock  

USD 14.03  0.07  0.50%

It looks as if Guaranty Federal will continue to recover much faster as its share price surged up 3.20% today. The company's current daily volatility is 3.29 percent, with a beta of -0.21 and an alpha of 0.1 over DOW. While some of us are getting more passionate about banking, it makes sense to digest Guaranty Federal Bancshares in greater detail to make a better estimate of its volatility. We will evaluate if Guaranty Federal shares are reasonably priced going into September.
Published over a month ago
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Breaking down Guaranty Federal (NASDAQ:GFED) volatility dip
Guaranty Federal Bancshares currently holds roughly 113.62 M in cash with 13.05 M of positive cash flow from operations. This results in cash-per-share (CPS) ratio of 25.95, which can makes it an attractive takeover target, given it will continue generating positive cash flow.
Investing in Guaranty Federal, 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 Guaranty Federal 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 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. Please check the breakdown between Guaranty Federal's total debt and its cash.

How Guaranty utilizes its cash?

To perform a cash flow analysis of Guaranty Federal, investors first need to understand how to read the cash flow statement. A cash flow statement shows the amount of cash Guaranty Federal is receiving and how much cash it distributes out in a given period. The Guaranty Federal cash flow statement breaks down these inflows and outflows into different buckets, including operating activities, investing activities, and financing activities. Guaranty Federal Net Cash Flow from Operations is projected to increase significantly based on the last few years of reporting. The past year's Net Cash Flow from Operations was at 8.33 Million

Guaranty Federal Correlation with Peers

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

Breaking down Guaranty Federal Indicators

We consider Guaranty Federal somewhat reliable. Guaranty Federal Ban holds Efficiency (Sharpe) Ratio of 0.0125, which attests that the entity had 0.0125% 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-eight technical indicators for Guaranty Federal Ban, which you can use to evaluate future volatility of the firm. Please check out Guaranty Federal market risk adjusted performance of (0.36), and Risk Adjusted Performance of 0.0479 to validate if the risk estimate we provide is consistent with the expected return of 0.041%.
Click cells to compare fundamentals   Check Volatility   Backtest Portfolio

Guaranty Federal implied volatility may change after the surge

Market Risk Adjusted Performance just dropped to -0.36, may indicate upcoming price decrease. 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

When is the right time to buy or sell Guaranty Federal Bancshares? Buying stocks such as Guaranty Federal isn't very hard. However, what challenging for most investors is doing it at the right time. Proper market timing is something most people cannot do without sophisticated tools, which help to isolate the right opportunities, deliver winning trades and diversify portfolios on a daily bases. On the whole, as of the 1st of August 2020, our research shows that Guaranty Federal is a rather somewhat reliable investment opportunity with a close to average probability of bankruptcy in the next two years. From a slightly different view, the entity currently appears to be overvalued. Our concluding 30 days buy-sell recommendation on the firm is Strong Sell.

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 Achuva Shats 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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