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Will Guaranty Bancshares (NASDAQ:GNTY) current volatility rise scare investors?
 | By Rifka Kats | Macroaxis Story |
It appears Guaranty Bancshares will continue to recover much faster as its share price surged up 0.22% today. The company current daily volatility is 2.42 percent, with a beta of -0.23 and an alpha of 0.32 over DOW. As many baby boomers are still indifferent towards banking, it makes sense to break down Guaranty Bancshares. I will address the reasons why this entity does not get much respect from investors under the current market uncertainty.
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Reviewed by Michael Smolkin
Guaranty Bancshares currently holds roughly 193.37 M in cash with 39.43 M of positive cash flow from operations. This results in cash-per-share (CPS) ratio of 17.62. This firm currently holds 162.3 M in liabilities with Debt to Equity (D/E) ratio of 0.16, which may suggest Guaranty Bancshares is not taking enough advantage from borrowing.
Please note, it is not enough to conduct a financial or market analysis of a single entity such as Guaranty Bancshares. Your research has to be compared to or analyzed against Guaranty Bancshares' peers to derive any actionable benefits. When done correctly, Guaranty Bancshares' 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 Guaranty Bancshares.
Investing in Guaranty Bancshares, 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 Bancshares 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 Guaranty Bancshares' 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 Guaranty Bancshares's Liquidity
Guaranty Bancshares financial leverage refers to using borrowed capital as a funding source to finance Guaranty Bancshares ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. Guaranty Bancshares 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 Bancshares' 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 Bancshares' 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 Bancshares's total debt and its cash.
Guaranty Bancshares Gross Profit
Guaranty Bancshares Gross Profit growth is one of the most critical measures in evaluating the company. The Gross Profit growth rate is calculated simply by comparing Guaranty Bancshares 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 Guaranty Bancshares Gross Profit growth over the last 10 years. Please check Guaranty Bancshares' gross profit and other fundamental indicators for more details.
Guaranty Bancshares 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 Bancshares. Diversification will allow for the same portfolio return with reduced risk. The correlation table of Guaranty Bancshares 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
Detailed Perspective On Guaranty Bancshares
Guaranty Bancshares appears to be very steady, given 1 month investment horizon. Guaranty Bancshares holds Efficiency (Sharpe) Ratio of 0.0976, which attests that the entity had 0.0976% 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 Bancshares, which you can use to evaluate future volatility of the firm. Please utilize Guaranty Bancshares market risk adjusted performance of (1.24), and Risk Adjusted Performance of 0.1336 to validate if our risk estimates are consistent with your expectations.
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