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Will the new Hexcel volatility hike frighten stakeholders?
 | By Raphi Shpitalnik | Macroaxis Story |
It appears without question that Hexcel may not recover as fast as we have hopped for as its price went down 0.45% today. Hexcel current daily volatility is 3.71 percent, with a beta of 0.78 and an alpha of 0.36 over DOW. As many millenniums are excited about the new volatility, it is fair to summarize Hexcel based on its historical price patterns. We will cover the possibilities of making Hexcel into a steady grower in February.
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Reviewed by Michael Smolkin
Hexcel has roughly 68 M in cash with 370.8 M of positive cash flow from operations. This results in cash-per-share (CPS) ratio of 0.81. This firm has 999.2 M in debt with debt to equity (D/E) ratio of 0.67, which is OK given its current industry classification. The company has a current ratio of 3.21, demonstrating that it is liquid and is capable to disburse its financial commitments when the payables are due.
Please note, it is not enough to conduct a financial or market analysis of a single entity such as Hexcel. Your research has to be compared to or analyzed against Hexcel's peers to derive any actionable benefits. When done correctly, Hexcel's 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 Hexcel.
Investing in Hexcel, 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 Hexcel 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 Hexcel's 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 Hexcel's Liquidity
Hexcel financial leverage refers to using borrowed capital as a funding source to finance Hexcel ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. Hexcel 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 Hexcel's 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 Hexcel's 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 Hexcel's total debt and its cash.
Hexcel Gross Profit
Hexcel Gross Profit growth is one of the most critical measures in evaluating the company. The Gross Profit growth rate is calculated simply by comparing Hexcel 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 Hexcel Gross Profit growth over the last 10 years. Please check Hexcel's gross profit and other fundamental indicators for more details.
Hexcel Correlation with Peers
Investors in Hexcel can reduce exposure to individual asset risk by holding a diversified portfolio of assets in addition to a long position in Hexcel. Diversification will allow for the same portfolio return with reduced risk. The correlation table of Hexcel and its peers is a two-dimensional matrix that shows the correlation coefficient between pairs of securities Hexcel 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 Hexcel for more details
Details
Hexcel appears to be very steady, given 1 month investment horizon. Hexcel holds Efficiency (Sharpe) Ratio of 0.18, which attests that the entity had 0.18% 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. By evaluating Hexcel technical indicators you can presently evaluate if the expected return of 0.67% is justified by implied risk. Please utilize Hexcel Downside Deviation of 3.03, risk adjusted performance of 0.1316, and Market Risk Adjusted Performance of 0.6457 to validate if our risk estimates are consistent with your expectations.
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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 Hexcel. Please refer to our Terms of Use for any information regarding our disclosure principles.