GMS Story

GMS -- USA Stock

USD 45.85 1.70 3.85%

Macroaxis Story

It looks like Masonite Worldwide will continue to recover faster as its price went down 3.93% today to GMS's 2.71%. As many rational traders are trying to avoid industrials space, it makes sense to sum up GMS Inc a little further and understand how it stands against Masonite Worldwide and other similar entities. We are going to discuss some of the competitive aspects of both GMS and Masonite.

Published over a month ago

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Is Masonite more volatile than GMS Inc (NYSE:GMS)?

By analyzing existing primary indicators between GMS and Masonite, you can compare the effects of market volatilities on both companies' prices and check if they can diversify away market risk if combined in one of your portfolios. You can also utilize pair trading strategies for matching a long position in Masonite with a short position in GMS. Check out our pair correlation module for more information.

Let's begin by analyzing the assets.

The asset utilization indicator refers to the revenue earned for every dollar of assets a company currently reports. GMS has an asset utilization ratio of 245.71 percent. This connotes that the company is making $2.46 for each dollar of assets. An increasing asset utilization means that GMS Inc is more efficient with each dollar of assets it utilizes for everyday operations.

Is Masonite more volatile than GMS Inc (NYSE:GMS)?

Out of tens of thousands of stocks, funds, and ETFs that trade on global exchanges each represent an individual company which you can analyze using comparative analysis. To determine which one of the two companies, such as GMS or Masonite is a better fit for your portfolio, analyzing a few basic fundamental indicators is a good first step.

How important is GMS's Liquidity

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

Correlation Between GMS and Masonite Worldwide Hld

In general, stock analysis is a method for investors and traders to make individual buying and selling decisions. Stock correlation analysis is also essential because it can help investors realize that they may not be as diversified as they think. Risk management strategies are usually required to make sure all portfolios are properly aligned against their risk tolerance level. You can consider holding GMS together with similar or unrelated positions with a negative correlation. For example, you can also add Masonite Worldwide to your portfolio. If Masonite Worldwide is not perfectly correlated to GMS it will diversify some of the market risks out of the positively correlated stocks in your portfolio. However, the disadvantage of this sort of hedging is that it can potentially affect your investment returns throughout market cycles. When GMS for example, for example, performs excellent and delivers stable returns, the negatively correlated position you locked in as a hedge may drag your returns down.

Please check pair correlation details between GMS and DOOR for more information.

Breaking it down

Revenue is income that a firm generates from business activities such us rendering services or selling goods to customers. It is a crucial part of a business and an essential item when evaluating a company's financial statements. Revenues from a firm's primary business operations can be reported on the income statement as sales revenue, net sales, or simply sales, depending on the industry in which a given company operates.
Revenue is typically recorded when cash or cash equivalents are exchanged for services or goods and can include product or services discounts, promotions, as well as early payments on invoices or services rendered in advance.

Revenue Breakdown

Lets now take a look at GMS revenue. Based on the latest financial disclosure, GMS Inc reported 3.15 B of revenue. This is 9.96% lower than that of the Industrials sector and significantly higher than that of the Building Products & Equipment industry. The revenue for all United States stocks is 66.61% higher than that of the entity. As for Masonite Worldwide we see revenue of 2.26 B, which is much higher than that of the Building Products & Equipment

	GMS	3.15 Billion
	Sector	0.0
	Masonite	2.26 Billion

3.1 B

GMS

Sector

2.3 B

Masonite

How will GMS retail investors react to the next fall?

Latest market risk adjusted performance is at 0.15. GMS Inc currently demonstrates below-average downside deviation. It has Information Ratio of 0.07 and Jensen Alpha of 0.14. However, we advise investors to further question GMS Inc expected returns to ensure all indicators are consistent with the current outlook about its relatively low value at risk. Understanding different market volatility trends often help investors to time the market. Properly using volatility indicators enable traders to measure GMS's stock risk against market volatility during both bullying and bearish trends. The higher level of volatility that comes with bear markets can directly impact GMS's stock price while adding stress to investors as they watch their shares' value plummet. This usually forces investors to rebalance their portfolios by buying different stocks as prices fall.

Our Bottom Line On GMS Inc

While few other entities within the building products & equipment industry are still a little expensive, even after the recent corrections, GMS may offer a potential longer-term growth to retail investors. The inconsistency in the assessment between current GMS valuation and our trade advice on GMS is due to the recent market swings and your selection of investing horizon. 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 GMS.

About Contributor

Raphi Shpitalnik is a Junior Member of Macroaxs Editorial Board. Raphael is a young entrepreneur who joined Macroaxis on a part-time base at the beginning of the pandemic and eventually acquired a real test for investing and fintech. He likes to analyze different equity instruments across a wide range of industries, focusing primarily on consumer products, sports, fintech, cannabis, and AI. View Profile

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 GMS Inc. Please refer to our Terms of Use for any information regarding our disclosure principles.

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