National CineMedia (NASDAQ:NCMI) high volatility trend continues
 | By Gabriel Shpitalnik | Macroaxis Story |
45% of stocks are less volatile than National, and 92% of all traded equity instruments are projected to make higher returns than the company over the 90 days investment horizon. As many old-fashioned traders are trying to avoid communication services space, it makes sense to concentrate on National CineMedia a little further and try to understand its current volatility patterns. We are going to examine if the current expected returns justify National CineMedia's volatility. National CineMedia high volatility, while potentially profitable, can lead to more considerable losses for your portfolios.
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Reviewed by Raphi Shpitalnik
National CineMedia currently holds roughly 246.9 M in cash with 191.7 M of positive cash flow from operations. This results in cash-per-share (CPS) ratio of 3.1. On a scale of 0 to 100, National CineMedia holds a performance score of 6. The company secures a Beta (Market Risk) of 1.5477, which conveys a somewhat significant risk relative to the market. Let's try to break down what National's beta means in this case. As the market goes up, the company is expected to outperform it. However, if the market returns are negative, National CineMedia will likely underperform. Although it is vital to follow National CineMedia price patterns, it is good to be conservative about what you can do with the information regarding equity historical price patterns. The philosophy towards estimating 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 analyzing National CineMedia technical indicators, you can presently evaluate if the expected return of 0.45% will be sustainable into the future. Please exercises National CineMedia expected short fall, and the relationship between the value at risk and daily balance of power to make a quick decision on whether National CineMedia current price movements will revert. Volatility is a rate at which the price of National CineMedia 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 National CineMedia may increase or decrease. In other words, similar to National's beta indicator, it measures the risk of National CineMedia and helps estimate the fluctuations that may happen in a short period of time. So if prices of National CineMedia 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 National CineMedia's Liquidity
National CineMedia financial leverage refers to using borrowed capital as a funding source to finance National CineMedia ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. National CineMedia 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 National CineMedia'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 National CineMedia'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 National CineMedia's total debt and its cash.
National CineMedia Gross Profit
National CineMedia Gross Profit growth is one of the most critical measures in evaluating the company. The Gross Profit growth rate is calculated simply by comparing National CineMedia 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 National CineMedia Gross Profit growth over the last 10 years. Please check National CineMedia's gross profit and other fundamental indicators for more details.
National CineMedia Volatility Drivers
National CineMedia unsystematic risk is unique to National CineMedia 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 National CineMedia you can also buy Townsquare Media. You can also mitigate this risk by investing in the communication services 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 National CineMedia 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 National CineMedia income statement and balance sheet. Here are more details about National volatility.Click cells to compare fundamentals
Breaking it down
This firm reported the previous year's revenue of 326.4 M. Net Income was 10.8 M with profit before overhead, payroll, taxes, and interest of 310.3 M.
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