By analyzing existing basic indicators between Northern Trust and Stifel, you can compare the effects of market volatilities on both companies' prices and check if they can diversify away market risk if combined in one of your portfolios. You can also utilize pair trading strategies for matching a long position in Stifel with a short position in Northern Trust. Check out our
pair correlation module for more information.
Let's begin by analyzing the assets.
The asset utilization indicator refers to the revenue earned for every dollar of assets a company currently reports. Northern Trust has an asset utilization ratio of 5.47 percent. This connotes that the company is making $0.0547 for each dollar of assets. An increasing asset utilization means that Northern Trust Corp is more efficient with each dollar of assets it utilizes for everyday operations.
Investment perspective, in general, refers to a viewpoint or opinion regarding investment opportunity in Northern Trust. It encompasses the assessment of an investment's potential risks and rewards, and expectations for its
performance over time. Several factors influence the investment perspective on Northern Trust, including investment goals, risk tolerance, time horizon, market conditions, and research and analysis. Investors have varying goals, such as capital preservation, income generation, or long-term growth. Risk tolerance plays a significant role in shaping an investor's perspective, with some being more risk-averse and others willing to take on higher risks for potential returns.
How important is Northern Trust's Liquidity
Northern Trust
financial leverage refers to using borrowed capital as a funding source to finance Northern Trust ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. Northern Trust 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 Northern Trust'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 Northern Trust'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 Northern Trust's total debt and its cash.
Northern Trust Gross Profit
Northern Trust Gross Profit growth is one of the most critical measures in evaluating the company. The Gross Profit growth rate is calculated simply by comparing Northern Trust 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 Northern Trust Gross Profit growth over the last 10 years. Please check Northern Trust's
gross profit and other
fundamental indicators for more details.
A Deeper Perspective
Revenue is income that a firm generates from business activities such us rendering services or selling goods to customers. It is a crucial part of a business and an essential item when evaluating a company's financial statements. Revenues from a firm's primary business operations can be reported on the income statement as sales revenue, net sales, or simply sales, depending on the industry in which a given company operates.
Revenue is typically recorded when cash or cash equivalents are exchanged for services or goods and can include product or services discounts, promotions, as well as early payments on invoices or services rendered in advance.
Revenue Breakdown
Lets now take a look at Northern Trust revenue. Based on the latest financial disclosure, Northern Trust Corp reported 6.39
B of revenue. This is 43.0% lower than that of the Financial Services sector and 19.22% higher than that of the
Asset Management industry. The revenue for all United States stocks is 32.27% higher than that of the entity. As for Stifel Financial we see revenue of 4.51
B, which is 15.85% lower than that of the Asset Management
| Northern | 6.39 Billion |
| Sector | 5.36 Billion |
| Stifel | 4.51 Billion |
Will Northern fall impact its fundamentals?
Latest Market Risk Adjusted Performance is up to 0.06. Price may fall again. Northern Trust Corp has relatively low volatility with skewness of -0.28 and kurtosis of 1.51. However, we advise all investors to independently investigate Northern Trust Corp to ensure all accessible information is consistent with the expectations about its upside potential and future expected returns. Understanding different market volatility trends often help investors to time the market. Properly using volatility indicators enable traders to measure Northern Trust'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 Northern Trust'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.
Northern Trust Implied Volatility
Northern Trust's implied volatility exposes the market's sentiment of Northern Trust Corp stock's possible movements over time. However, it does not forecast the overall direction of its price. In a nutshell, if Northern Trust'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 Northern Trust stock will not fluctuate a lot when Northern Trust's options are near their expiration.
The Bottom Line
While many other companies in the asset management industry are either recovering or due for a correction, Northern may not be as strong as the others in terms of longer-term growth potentials. While some retail investors may not share our view, we believe it may be a good time to increase your existing holdings in Northern as the risk-reward trade off is appealing enough to hold a position. 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 Northern Trust.
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 ArchitectEditorial 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 Northern Trust. 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
