Gates Story

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GTES -- USA Stock  

USD 15.64  0.80  4.87%

It seems Gates Industrial will continue to recover much faster as its share price surged up 1.65% today. Gates Industrial current daily volatility is 2.11 percent, with a beta of 1.35 and an alpha of 0.28 over DOW. As many millenniums are trying to avoid machinery, it makes sense to sum up Gates Industrial a little further and try to understand its current market patterns. Why are we still confident in our projection for a recovery.
Published over two weeks ago
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Will Gates Industrial (NYSE:GTES) latest volatility spike scare retail investors?
Gates Industrial currently holds roughly 672.3 M in cash with 331.2 M of positive cash flow from operations. This results in cash-per-share (CPS) ratio of 2.31. This firm currently holds 3.16 B in liabilities with Debt to Equity (D/E) ratio of 1.07, which is about average as compared to similar companies. The company has a current ratio of 3.07, suggesting that it is liquid enough and is able to pay its financial obligations when due.
Investing in Gates Industrial, 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 Gates Industrial 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, frequently view the market will even out over time. This tendency of Gates Industrial's stock 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. Please use the tools below to analyze the current value of Gates Industrial in the context of predictive analytics.
Please note, it is not enough to conduct a financial or market analysis of a single entity such as Gates Industrial. Your research has to be compared to or analyzed against Gates Industrial's peers to derive any actionable benefits. When done correctly, Gates Industrial's competitive analysis will give you plenty of quantitative and qualitative data to validate your investment decisions or develop an entirely new strategy towards taking a position in Gates Industrial Corp.

How important is Gates Industrial's Liquidity

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

How Gates utilizes its cash?

To perform a cash flow analysis of Gates Industrial, investors first need to understand how to read the cash flow statement. A cash flow statement shows the amount of cash Gates Industrial is receiving and how much cash it distributes out in a given period. The Gates Industrial cash flow statement breaks down these inflows and outflows into different buckets, including operating activities, investing activities, and financing activities.
Gates Industrial Net Cash Flow from Operations is relatively stable at the moment as compared to the past year. Gates Industrial reported last year Net Cash Flow from Operations of 309 Million

Gates Industrial Correlation with Peers

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

Another Deeper Perspective

Gates Industrial appears to be not too volatile, given 1 month investment horizon. Gates Industrial holds Efficiency (Sharpe) Ratio of 0.16, which attests that the entity had 0.16% of return per unit of risk over the last month. Our standpoint towards 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 Gates Industrial, which you can use to evaluate future volatility of the firm. Please utilize Gates Industrial Risk Adjusted Performance of 0.1609, market risk adjusted performance of 0.3162, and Downside Deviation of 1.97 to validate if our risk estimates are consistent with your expectations.
Click cells to compare fundamentals   Check Volatility   Backtest Portfolio

Some Gates technical indicators suggest relapse

Market risk adjusted performance is down to 0.32. It may connote a possible volatility fall. Gates Industrial has relatively low volatility with skewness of 0.25 and kurtosis of 0.49. However, we advise all investors to independently investigate Gates Industrial to ensure all accessible information is consistent with the expectations about its upside potential and future expected returns.

Our Bottom Line On Gates Industrial

While other companies within the specialty industrial machinery industry are still a little expensive, even after the recent corrections, Gates Industrial may offer a potential longer-term growth to retail investors. While some short-term oriented retail investors may not share our view, we believe it may be a good time to acquire new shares of Gates.

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 Gates Industrial Corp. Please refer to our Terms of Use for any information regarding our disclosure principles.

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