Is Invesco Plc (NYSE:IVZ) a good hedge for your existing portfolios?

Macroaxis Story

Invesco Plc is generating negative expected returns assuming volatility of 2.0686% on return distribution over 60 days investment horizon. As many adventurous traders are excited about financial services space, it is only fair to break down the risk of shorting Invesco Plc based on its current volatility spike. We will evaluate if Invesco Plc's current volatility will continue into February. Invesco Plc's low volatility may still impact the value of the stock as we estimate it as currently undervalued. The real value, based on our analysis, is getting close to 26.41 per share.

Published over a year ago

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Reviewed by Rifka Kats

Invesco Plc has roughly 1.8 B in cash with 1.65 B of positive cash flow from operations. This results in cash-per-share (CPS) ratio of 3.91.

Is Invesco Plc (NYSE:IVZ) a good hedge for your existing portfolios?

Volatility is a rate at which the price of Invesco Plc 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 Invesco Plc may increase or decrease. In other words, similar to Invesco's beta indicator, it measures the risk of Invesco Plc and helps estimate the fluctuations that may happen in a short period of time. So if prices of Invesco Plc 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 Invesco Plc's Liquidity

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

Invesco Plc Gross Profit

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

Invesco Plc Volatility Drivers

Invesco Plc unsystematic risk is unique to Invesco Plc 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 Invesco Plc you can also buy Visa Class A. You can also mitigate this risk by investing in the financials 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 Invesco Plc 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 Invesco Plc income statement and balance sheet. Here are more details about Invesco volatility.

	Total Assets	Net Debt	Total Liab	Common Stock	Good Will	Capital Stock	Total Revenue	Gross Profit	Net Income	Tax Provision	Ptb Ratio	Pb Ratio	Ev To Sales	Payout Ratio	Pfcf Ratio	Pe Ratio	Current Ratio	Graham Number	Ebt Per Ebit	Quick Ratio	Cash Ratio	Debt Ratio	Market Cap
Total Assets		0.88	0.91	-0.7	0.73	0.53	0.92	0.81	0.42	-0.17	0.7	0.7	-0.83	0.1	0.03	-0.18	-0.11	0.71	-0.45	0.05	0.02	0.33	-0.5
Net Debt	0.88		0.66	-0.75	0.71	0.57	0.94	0.94	0.4	-0.08	0.75	0.75	-0.85	0.03	0.15	-0.24	-0.05	0.69	-0.45	0.2	0.22	0.62	-0.26
Total Liab	0.91	0.66		-0.59	0.55	0.24	0.73	0.58	0.41	-0.13	0.59	0.59	-0.67	0.23	-0.11	-0.02	-0.28	0.62	-0.3	-0.25	-0.29	0.15	-0.55
Common Stock	-0.7	-0.75	-0.59		-0.34	-0.18	-0.81	-0.79	-0.33	0.14	-1.0	-1.0	0.92	0.04	0.0	0.32	-0.02	-0.65	0.0	0.01	-0.11	-0.78	-0.14
Good Will	0.73	0.71	0.55	-0.34		0.74	0.71	0.59	0.36	-0.02	0.35	0.35	-0.54	0.08	0.2	-0.1	-0.16	0.55	-0.56	0.11	0.07	0.1	-0.33
Capital Stock	0.53	0.57	0.24	-0.18	0.74		0.55	0.57	-0.11	-0.5	0.21	0.21	-0.49	-0.46	0.22	-0.57	0.39	0.16	-0.68	0.63	0.64	-0.05	-0.3
Total Revenue	0.92	0.94	0.73	-0.81	0.71	0.55		0.9	0.53	-0.07	0.81	0.81	-0.88	0.04	0.11	-0.24	-0.04	0.8	-0.3	0.17	0.22	0.57	-0.28
Gross Profit	0.81	0.94	0.58	-0.79	0.59	0.57	0.9		0.28	-0.25	0.78	0.78	-0.85	-0.21	0.14	-0.45	0.12	0.56	-0.43	0.2	0.32	0.68	-0.17
Net Income	0.42	0.4	0.41	-0.33	0.36	-0.11	0.53	0.28		0.73	0.31	0.31	-0.23	0.68	-0.02	0.54	-0.52	0.89	0.36	-0.24	-0.22	0.35	-0.25
Tax Provision	-0.17	-0.08	-0.13	0.14	-0.02	-0.5	-0.07	-0.25	0.73		-0.16	-0.16	0.33	0.86	-0.07	0.88	-0.58	0.45	0.47	-0.31	-0.42	0.19	0.05
Ptb Ratio	0.7	0.75	0.59	-1.0	0.35	0.21	0.81	0.78	0.31	-0.16		1.0	-0.93	-0.07	0.01	-0.34	0.05	0.65	0.0	0.01	0.13	0.76	0.15
Pb Ratio	0.7	0.75	0.59	-1.0	0.35	0.21	0.81	0.78	0.31	-0.16	1.0		-0.93	-0.07	0.01	-0.34	0.05	0.65	0.0	0.01	0.13	0.76	0.15
Ev To Sales	-0.83	-0.85	-0.67	0.92	-0.54	-0.49	-0.88	-0.85	-0.23	0.33	-0.93	-0.93		0.18	-0.05	0.47	-0.14	-0.61	0.25	-0.18	-0.28	-0.59	0.06
Payout Ratio	0.1	0.03	0.23	0.04	0.08	-0.46	0.04	-0.21	0.68	0.86	-0.07	-0.07	0.18		-0.1	0.95	-0.65	0.51	0.28	-0.33	-0.6	0.07	-0.2
Pfcf Ratio	0.03	0.15	-0.11	0.0	0.2	0.22	0.11	0.14	-0.02	-0.07	0.01	0.01	-0.05	-0.1		-0.11	0.15	0.03	-0.12	0.22	0.2	0.09	0.31
Pe Ratio	-0.18	-0.24	-0.02	0.32	-0.1	-0.57	-0.24	-0.45	0.54	0.88	-0.34	-0.34	0.47	0.95	-0.11		-0.63	0.26	0.35	-0.35	-0.62	-0.11	-0.14
Current Ratio	-0.11	-0.05	-0.28	-0.02	-0.16	0.39	-0.04	0.12	-0.52	-0.58	0.05	0.05	-0.14	-0.65	0.15	-0.63		-0.34	-0.24	0.58	0.7	-0.05	0.22
Graham Number	0.71	0.69	0.62	-0.65	0.55	0.16	0.8	0.56	0.89	0.45	0.65	0.65	-0.61	0.51	0.03	0.26	-0.34		0.18	-0.03	-0.03	0.5	-0.23
Ebt Per Ebit	-0.45	-0.45	-0.3	0.0	-0.56	-0.68	-0.3	-0.43	0.36	0.47	0.0	0.0	0.25	0.28	-0.12	0.35	-0.24	0.18		-0.22	-0.12	0.12	0.4
Quick Ratio	0.05	0.2	-0.25	0.01	0.11	0.63	0.17	0.2	-0.24	-0.31	0.01	0.01	-0.18	-0.33	0.22	-0.35	0.58	-0.03	-0.22		0.89	-0.02	-0.04
Cash Ratio	0.02	0.22	-0.29	-0.11	0.07	0.64	0.22	0.32	-0.22	-0.42	0.13	0.13	-0.28	-0.6	0.2	-0.62	0.7	-0.03	-0.12	0.89		0.1	0.06
Debt Ratio	0.33	0.62	0.15	-0.78	0.1	-0.05	0.57	0.68	0.35	0.19	0.76	0.76	-0.59	0.07	0.09	-0.11	-0.05	0.5	0.12	-0.02	0.1		0.4
Market Cap	-0.5	-0.26	-0.55	-0.14	-0.33	-0.3	-0.28	-0.17	-0.25	0.05	0.15	0.15	0.06	-0.2	0.31	-0.14	0.22	-0.23	0.4	-0.04	0.06	0.4

Click cells to compare fundamentals

Another angle On Invesco Plc

The current Invesco Plc price slide may raise some interest from investors. The stock closed today at a share price of 21.94 on 5,380,708 in trading volume. The company executives were unable to exploit market volatilities in December. However, diversifying your overall positions with Invesco Plc can protect your principal portfolio during market swings. The stock standard deviation of daily returns for 90 days investing horizon is currently 2.07. The current volatility is consistent with the ongoing market swings in December 2021 as well as with Invesco Plc unsystematic, company-specific events.

Will Invesco continue to rise?

Potential upside is down to 3.55. It may suggest a possible volatility slide. Invesco Plc exhibits very low volatility with skewness of 0.22 and kurtosis of 0.08. However, we advise investors to further study Invesco Plc technical indicators to make sure all market info is available and is reliable. Understanding different market volatility trends often help investors to time the market. Properly using volatility indicators enable traders to measure Invesco Plc's stock risk against market volatility during both bullying and bearish trends. The higher level of volatility that comes with bear markets can directly impact Invesco Plc's 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.

Invesco Plc Implied Volatility

Invesco Plc's implied volatility exposes the market's sentiment of Invesco Plc stock's possible movements over time. However, it does not forecast the overall direction of its price. In a nutshell, if Invesco Plc's 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 Invesco Plc stock will not fluctuate a lot when Invesco Plc's options are near their expiration.

Our Bottom Line On Invesco Plc

While some firms in the asset management industry are either recovering or due for a correction, Invesco may not be as strong as the others in terms of longer-term growth potentials. On the whole, as of the 25th of January 2022, we believe that at this point, Invesco Plc is undervalued with below average probability of distress within the next 2 years. Our overall buy-or-sell advice on the company is Strong Hold.

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Editorial Staff

Ellen Johnson is a Member of Macroaxis Editorial Board. Ellen covers public companies in North America, focusing primarily on valuation and volatility. Six years of experience in 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 Ellen Johnson do not own shares of Invesco Plc. Please refer to our Terms of Use for any information regarding our disclosure principles.

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