What March volatility we project for IDEX (USA Stocks:IEX)?

As calm as a millpond, IDEX Corporation's (IEX) investment outlook has been marked by low volatility, a trend that investors are hoping will continue through March. The company, a key player in the industrials sector and specifically in machinery, has a real value of $197.53, slightly below its market value of $218.22. Despite a negative daily balance of power at -0.81, the accumulation distribution stands at a healthy 5.2K. With six strong buy recommendations from analysts and an overall consensus of 'Buy', the company's stability seems to be in good standing. However, the question remains: will this low-risk investment outlook remain stable through the next month? IDEX Corporation, with a daily return of 0.2205% and volatility of 1.0473% over a 60-day investment horizon, appeals to risk-tolerant traders. It's crucial to evaluate the risk of investing in IDEX, given the current market volatility. We will explore the potential for IDEX's current volatility to persist until March. Despite its low volatility, we believe IDEX is currently overvalued, and this may not significantly impact the stock's value. Our calculations suggest the real value is nearing $197.53 per share.
Published over six months ago
View all stories for IDEX | View All Stories
Macroaxis uses a strict editorial review process to publish stories and blog posts. Our publishers support our company and may receive a small commission when the partner links or references are utilized. Commissions do not affect the opinions or evaluations of our editorial team. The information our editors and media partners deliver is confidential and licensed for your sole use as a Macroaxis user. We reserve all rights to the content of this article, and therefore copying or distributing this story in whole or in part is strictly prohibited.

Reviewed by Michael Smolkin

IDEX Corporation holds approximately $430.2 million in cash, with a positive cash flow from operations of $683 million. This results in a cash-per-share (CPS) ratio of 9.63.

Main Points

IDEX Corporation's (IEX) stock has shown a low-risk investment outlook, with a Coefficient of Variation at 472.33 and a Standard Deviation of 1.1, indicating a relatively stable performance. However, the Total Risk Alpha of -0.25 suggests a potential for slight losses. The company's Mean Deviation stands at 0.82, further reinforcing the low volatility of the stock. Investors should monitor these metrics through March to ensure the stability of IDEX's investment outlook.
Volatility is a rate at which the price of IDEX 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 IDEX may increase or decrease. In other words, similar to IDEX's beta indicator, it measures the risk of IDEX and helps estimate the fluctuations that may happen in a short period of time. So if prices of IDEX 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 IDEX's Liquidity

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

IDEX Gross Profit

IDEX Gross Profit growth is one of the most critical measures in evaluating the company. The Gross Profit growth rate is calculated simply by comparing IDEX 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 IDEX Gross Profit growth over the last 10 years. Please check IDEX's gross profit and other fundamental indicators for more details.

IDEX Volatility Drivers

IDEX unsystematic risk is unique to IDEX 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 IDEX you can also buy Donaldson. You can also mitigate this risk by investing in the industrials 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 IDEX 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 IDEX income statement and balance sheet. Here are more details about IDEX volatility.
0.580.990.640.84-0.60.970.960.920.660.770.770.76-0.120.6-0.170.050.960.50.20.43-0.620.58
0.580.630.320.51-0.550.60.590.540.710.250.250.11-0.050.08-0.21-0.640.540.24-0.53-0.42-0.230.27
0.990.630.680.85-0.520.970.960.90.640.790.790.73-0.10.63-0.170.020.930.550.190.4-0.650.63
0.640.320.680.72-0.050.750.750.520.230.880.880.290.10.53-0.090.320.540.830.540.54-0.980.94
0.840.510.850.72-0.190.830.830.790.70.720.720.69-0.120.81-0.120.220.810.770.330.35-0.650.54
-0.6-0.55-0.52-0.05-0.19-0.54-0.52-0.57-0.48-0.12-0.12-0.320.130.190.20.46-0.610.190.390.06-0.02-0.01
0.970.60.970.750.83-0.541.00.910.620.840.840.67-0.090.58-0.20.010.930.590.210.42-0.730.7
0.960.590.960.750.83-0.521.00.920.620.860.860.69-0.120.61-0.220.00.930.60.210.42-0.720.7
0.920.540.90.520.79-0.570.910.920.680.70.70.8-0.430.63-0.45-0.050.990.550.090.33-0.480.43
0.660.710.640.230.7-0.480.620.620.680.220.220.43-0.150.41-0.13-0.360.680.3-0.32-0.23-0.140.05
0.770.250.790.880.72-0.120.840.860.70.221.00.62-0.060.71-0.170.350.710.750.570.69-0.910.89
0.770.250.790.880.72-0.120.840.860.70.221.00.62-0.060.71-0.170.350.710.750.570.69-0.910.89
0.760.110.730.290.69-0.320.670.690.80.430.620.62-0.310.78-0.160.310.820.350.360.56-0.30.23
-0.12-0.05-0.10.1-0.120.13-0.09-0.12-0.43-0.15-0.06-0.06-0.31-0.230.940.11-0.35-0.320.130.03-0.130.15
0.60.080.630.530.810.190.580.610.630.410.710.710.78-0.23-0.120.470.620.710.530.52-0.550.45
-0.17-0.21-0.17-0.09-0.120.2-0.2-0.22-0.45-0.13-0.17-0.17-0.160.94-0.120.21-0.37-0.420.160.050.06-0.07
0.05-0.640.020.320.220.460.010.0-0.05-0.360.350.350.310.110.470.21-0.010.350.950.82-0.40.3
0.960.540.930.540.81-0.610.930.930.990.680.710.710.82-0.350.62-0.37-0.010.520.130.37-0.50.45
0.50.240.550.830.770.190.590.60.550.30.750.750.35-0.320.71-0.420.350.520.50.41-0.790.7
0.2-0.530.190.540.330.390.210.210.09-0.320.570.570.360.130.530.160.950.130.50.92-0.620.54
0.43-0.420.40.540.350.060.420.420.33-0.230.690.690.560.030.520.050.820.370.410.92-0.630.58
-0.62-0.23-0.65-0.98-0.65-0.02-0.73-0.72-0.48-0.14-0.91-0.91-0.3-0.13-0.550.06-0.4-0.5-0.79-0.62-0.63-0.98
0.580.270.630.940.54-0.010.70.70.430.050.890.890.230.150.45-0.070.30.450.70.540.58-0.98
Click cells to compare fundamentals

What is driving IDEX Investor Appetite?

The current bullish price patterns experienced by current IDEX shareholders may raise some interest from investors. The stock closed today at a share price of 218.22 on 367,904 in trading volume. The company directors and management have been very successful in rebalancing the firm assets at opportune times to take advantage of market volatility in January. The stock standard deviation of daily returns for 90 days investing horizon is currently 1.05. The below-average Stock volatility is a good sign for longer-term investment options and for buy-and-hold investors.
 2021 2022 2023 2024 (projected)
Consolidated Income449.3M586.7M674.7M567.9M
Direct Expenses1.5B1.8B1.6B1.4B
As the saying goes, "low risk often means low returns," but IDEX Corporation (IEX) seems to be an exception to this rule. With a Beta of 0.96, the stock exhibits lower volatility than the market, making it a potentially safer bet for investors. The company's strong financial health, indicated by a current ratio of 3.23X and a low debt-to-equity ratio of 0.46%, further underscores its low-risk profile. Moreover, IDEX's robust operating margin of 0.24% and a net income of $617.5M suggest a stable earnings outlook. However, investors should keep an eye on the company's downside deviation of 0.8488 and downside variance of 0.7204, which could signal potential risks in the future. .

Another setback for IDEX investors

IDEX Corporation's stock displays bearish tendencies, with a current Jensen Alpha of -0.04, suggesting potential risk-adjusted performance issues. This negative value, a measure of IDEX's systematic risk against expected market return, indicates the stock may not offer sufficient return for its inherent risk. This could lead to a further decline in stock price, posing a setback for IDEX investors. IDEX Corporation has low volatility, with a Treynor Ratio of 0.2, Maximum Drawdown of 4.7, and Kurtosis of 2.0. However, investors are advised to further analyze IDEX Corporation to ensure all market information is considered and aligns with expectations about IDEX's upside potential. Understanding market volatility trends can help investors time the market. Proper use of volatility indicators can measure IDEX's stock risk against market volatility during bullish and bearish trends.
High volatility in bear markets can impact IDEX's stock price and stress investors, often prompting portfolio rebalancing. In conclusion, the recent price rise of IDEX Corporation (IEX) may seem misleading at first glance, but a deeper analysis reveals a more nuanced picture. The company's valuation market value stands at $218.22, slightly below the analyst target price estimated value of $222.9. This suggests that the stock is not overvalued as it might appear. Furthermore, the analyst overall consensus is a 'Buy', with 6 strong buys, 1 buy, and 4 holds. The valuation real value of $197.53, while lower than the current market value, is still above the analyst's lowest estimated target price of $200. Therefore, despite the recent price rise, IDEX Corporation still presents a potentially profitable investment opportunity. .

Building efficient market-beating portfolios requires time, education, and a lot of computing power!

The Portfolio Architect is an AI-driven system that provides multiple benefits to our users by leveraging cutting-edge machine learning algorithms, statistical analysis, and predictive modeling to automate the process of asset selection and portfolio construction, saving time and reducing human error for individual and institutional investors.

Try AI Portfolio Architect

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 Gabriel Shpitalnik do not own shares of IDEX Corporation. Please refer to our Terms of Use for any information regarding our disclosure principles.

Would you like to provide feedback on the content of this article?

You can get in touch with us directly or send us a quick note via email to editors@macroaxis.com