Harvest Story

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HCAP -- USA Stock  

USD 7.71  0.04  0.52%

Harvest Capital is currently generating 1.0185% in daily expected returns and assumes 5.8786% risk (volatility on return distribution) over the 60 days horizon. While some risk-loving traders are indifferent towards current market volatility, it is reasonable to recap the risk of investing in Harvest Capital Credit. We are going to focus on if the current expected returns justify Harvest Capital's volatility.
Published over a month ago
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Harvest Capital (NASDAQ:HCAP) high volatility trend continues
Harvest Capital Credit currently holds 73.29 M in liabilities with Debt to Equity (D/E) ratio of 1.21, which is about average as compared to similar companies. The entity has a current ratio of 26.81, suggesting that it is liquid enough and is able to pay its financial obligations when due. Harvest Capital holds a performance score of 12 on a scale of zero to a hundred. The company retains a Market Volatility (i.e. Beta) of 0.6538, which attests to possible diversification benefits within a given portfolio. Let's try to break down what Harvest's beta means in this case. As returns on the market increase, Harvest Capital returns are expected to increase less than the market. However, during the bear market, the loss on holding Harvest Capital will be expected to be smaller as well. Although it is vital to follow Harvest Capital Credit current price history, it is good to be conservative about what you can do with the information regarding equity current price movements. Our philosophy towards determining future performance of any stock is to look not only at its past charts but also at the business as a whole, including all fundamental and technical indicators. To evaluate if Harvest Capital Credit expected return of 1.02 will be sustainable into the future, we have found twenty-one different technical indicators, which can help you to check if the expected returns are sustainable. Use Harvest Capital Credit variance, maximum drawdown, as well as the relationship between the Maximum Drawdown and semi variance to analyze future returns on Harvest Capital Credit.
Volatility is a rate at which the price of Harvest Capital 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 Harvest Capital may increase or decrease. In other words, similar to Harvest's beta indicator, it measures the risk of Harvest Capital and helps estimate the fluctuations that may happen in a short period of time. So if prices of Harvest Capital 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 Harvest Capital's Liquidity

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

How Harvest utilizes its cash?

To perform a cash flow analysis of Harvest Capital, investors first need to understand how to read the cash flow statement. A cash flow statement shows the amount of cash Harvest Capital is receiving and how much cash it distributes out in a given period. The Harvest Capital cash flow statement breaks down these inflows and outflows into different buckets, including operating activities, investing activities, and financing activities. Harvest Capital Net Cash Flow from Operations is very stable at the moment as compared to the past year. Harvest Capital reported last year Net Cash Flow from Operations of (26.67 Million)

Harvest Capital Volatility Drivers

Harvest Capital unsystematic risk is unique to Harvest Capital Credit and usually not directly affected by the market or economic environment. An example of unsystematic risk is the possibility of poor earnings or a layoff due to coronavirus. One may mitigate nonsystematic risk by buying different securities in the same industry or by buying in different sectors. For example, if you have a position in Harvest Capital you can also buy Jupai Holdings Limited. You can also mitigate this risk by investing in the asset management sector as well as in companies having nothing to do with it. This type of risk is also called diversifiable risk and can be understood from analyzing Harvest Capital important indicators over time. Here we run a correlation analysis between relevant fundamental ratios over at least ten year period to find a relationship in the way they react to changes in Harvest Capital income statement and balance sheet. Here are more details about Harvest volatility.
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Click cells to compare fundamentals   

What is driving Harvest Capital Investor Appetite?

The firm reported the previous year's revenue of 12.26 M. Net Loss for the year was (5.13 M) with profit before overhead, payroll, taxes, and interest of 12.67 M.

Our take on Harvest Capital small decline

Harvest Capital recent skewness upswings over 1.55. Harvest Capital Credit shows above-average downside volatility for the selected time horizon. We advise investors to inspect Harvest Capital Credit further and ensure that all market timing and asset allocation strategies are consistent with the estimation of Harvest Capital future alpha.

Our Bottom Line On Harvest Capital Credit

Although some firms in the asset management industry are either recovering or due for a correction, Harvest may not be as strong as the others in terms of longer-term growth potentials. To conclude, as of the 24th of December 2020, we believe that at this point, Harvest Capital is overvalued with close to average chance of financial distress within the next 2 years. Our concluding Buy-Hold-Sell recommendation on the firm is Hold.

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 Raphi Shpitalnik do not own shares of Harvest Capital Credit. Please refer to our Terms of Use for any information regarding our disclosure principles.

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