Insteel Industries currently holds roughly 89.88
M in cash with 69.88
M of positive cash flow from operations. This results in cash-per-share (CPS) ratio of 4.63.
Insteel Industries has
performance score of 4 on a scale of 0 to 100. The company retains a Market Volatility (i.e., Beta) of 1.0025, which attests to a somewhat significant risk relative to the market. Let's try to break down what Insteel's beta means in this case. Insteel Industries returns are very sensitive to returns on the market. As the market goes up or down, Insteel Industries is expected to follow. Although it is extremely important to respect
Insteel Industries current price history, it is better to be realistic regarding the information on equity current price movements. The philosophy towards determining
future performance of any stock is to evaluate the business as a whole together with its past performance, including all
available fundamental and
technical indicators. By evaluating
Insteel Industries technical indicators, you can presently evaluate if the expected return of 0.14% will be sustainable into the future.
Insteel Industries right now retains a risk of 2.29%. Please check out Insteel Industries
value at risk, as well as the
relationship between the skewness and
day median price to decide if Insteel Industries will be following its current trending patterns.
Investing in Insteel Industries, 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 Insteel Industries 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 Insteel Industries' 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 note, it is not enough to conduct a financial or market analysis of a single entity such as Insteel Industries. Your research has to be compared to or analyzed against Insteel Industries' peers to derive any actionable benefits. When done correctly, Insteel Industries' 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 Insteel Industries.
How important is Insteel Industries's Liquidity
Insteel Industries
financial leverage refers to using borrowed capital as a funding source to finance Insteel Industries ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. Insteel Industries 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 Insteel Industries' 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 Insteel Industries' 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 Insteel Industries's total debt and its cash.
Insteel Industries Gross Profit
Insteel Industries Gross Profit growth is one of the most critical measures in evaluating the company. The Gross Profit growth rate is calculated simply by comparing Insteel Industries 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 Insteel Industries Gross Profit growth over the last 10 years. Please check Insteel Industries'
gross profit and other
fundamental indicators for more details.
Insteel Industries Correlation with Peers
Investors in Insteel can reduce exposure to individual asset risk by holding a diversified portfolio of assets in addition to a long position in Insteel Industries. Diversification will allow for the same portfolio return with reduced risk. The correlation table of Insteel Industries and its peers is a two-dimensional matrix that shows the correlation coefficient between pairs of securities Insteel 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 Insteel for more details
Breaking down the case for Insteel Industries
We consider Insteel Industries very steady.
Insteel Industries holds Efficiency (Sharpe) Ratio of 0.0625, which attests that the entity had 0.0625% of return per unit of risk over the last 3 months. 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-eight
technical indicators for Insteel Industries, which you can use to evaluate the future volatility of the firm. Please check out Insteel Industries Market Risk Adjusted Performance of 0.0134,
downside deviation of 2.1, and Risk Adjusted Performance of 0.0112 to validate if the risk estimate we provide is consistent with the expected return of 0.14%.
Possible February correction of Insteel?
Insteel Industries latest standard deviation surges over 2.29. Insteel Industries currently demonstrates below-average downside deviation. It has Information Ratio of 0.01 and Jensen Alpha of 0.02. However, we advise investors to further question Insteel Industries expected returns to ensure all indicators are consistent with the current outlook about its relatively low value at risk. Understanding different market volatility trends often help investors to time the market. Properly using volatility indicators enable traders to measure Insteel Industries' stock risk against market volatility during both bullying and bearish trends. The higher level of volatility that comes with bear markets can directly impact Insteel Industries' 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.
Insteel Industries Implied Volatility
Insteel Industries' implied volatility exposes the market's sentiment of Insteel Industries stock's possible movements over time. However, it does not forecast the overall direction of its price. In a nutshell, if Insteel Industries' implied volatility is high, the market thinks the stock has potential for high price swings in either direction. On the other hand, the low implied volatility suggests that Insteel Industries stock will not fluctuate a lot when Insteel Industries' options are near their expiration.
Our Conclusion on Insteel Industries
Whereas other entities within the metal fabrication industry are still a little expensive, even after the recent corrections, Insteel Industries may offer a potential longer-term growth to institutional investors. With a somewhat neutral outlook on your 90 days horizon, it may be better to hold off any trading activity and neither trade new shares of Insteel nor exit your existing holdings in the Stock. It seems the expected volatility has not yet been fully factored into the current price. Please use our equity advice module to run different scenarios to ensure your current risk level and investment horizon are fully reflective of your current investing preferences in regards to Insteel Industries.
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Vlad Skutelnik is a Macroaxis Contributor. Vlad covers stocks, funds, cryptocurrencies, and ETFs that are traded in North America, focusing primarily on fundamentals, valuation and market volatility. He has many years of experience in fintech, predictive investment analytics, and risk management.
View Profile 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 Vlad Skutelnik do not own shares of Insteel Industries. Please refer to our
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