Is Green Plains (NASDAQ:GPP) a good hedge for your existing portfolios?

23% of stocks are less volatile than Green, and above 98% of all equities are expected to generate higher returns over the next 90 days. While some risk-seeking insiders are getting worried about energy space, it is reasonable to recap Green Plains Partners as a possible investment alternative. We will evaluate if Green Plains' current volatility will continue into September.
Published over a year ago
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Reviewed by Gabriel Shpitalnik

Green Plains Partners has roughly 71 K in cash with 45.32 M of positive cash flow from operations.
Volatility is a rate at which the price of Green Plains or any other equity instrument increases or decreases for a given set of returns. It is measured by calculating the standard deviation of the annualized returns over a given period of time and shows the range to which the price of Green Plains may increase or decrease. In other words, similar to Green's beta indicator, it measures the risk of Green Plains and helps estimate the fluctuations that may happen in a short period of time. So if prices of Green Plains fluctuate rapidly in a short time span, it is termed to have high volatility, and if it swings slowly in a more extended period, it is understood to have low volatility. Please read more on our technical analysis page.

How important is Green Plains's Liquidity

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

Going after Green Financials

This firm reported the last year's revenue of 83.48 M. Total Income to common stockholders was 40.67 M with profit before taxes, overhead, and interest of 57.22 M.
 2018 2019 2020 2021 (projected)
Current Assets16.62 M17.43 M17.99 M19.99 M
Total Assets81.14 M105.65 M105.32 M105.97 M

Will Green price decline impact its balance sheet?

Recent standard deviation is at 2.76. Green Plains Partners has relatively low volatility with skewness of 3.88 and kurtosis of 24.76. However, we advise all investors to independently investigate Green Plains Partners to ensure all accessible information is consistent with the expectations about its upside potential and future expected returns. Understanding different market volatility trends often help investors to time the market. Properly using volatility indicators enable traders to measure Green Plains' stock risk against market volatility during both bullying and bearish trends. The higher level of volatility that comes with bear markets can directly impact Green Plains' 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 Conclusion on Green Plains

Although many of the other players within the oil & gas midstream industry are still a little expensive, even after the recent corrections, Green Plains may offer a potential longer-term growth to insiders. To conclude, as of the 1st of August 2021, our analysis shows that Green Plains moves indifferently to market moves. The firm is overvalued and projects below average chance of bankruptcy for the next 2 years. Our actual 90 days 'Buy-Sell' recommendation on the firm is Strong Sell.

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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 Raphi Shpitalnik do not own shares of Green Plains Partners. Please refer to our Terms of Use for any information regarding our disclosure principles.

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