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Breaking down Prosperity Bancshares (NYSE:PB) volatility slip
 | By Vlad Skutelnik | Macroaxis Story |
It appears Prosperity Bancshares may not recover as fast as we have hopped for as its price went down 0.71% today. The entity current daily volatility is 2.61 percent, with a beta of 0.29 and an alpha of 0.33 over DOW. Whilst many millenniums are getting more into investing against high market volatility, it is quite pruden to go over Prosperity Bancshares based on its historical prices. We will evaluate why we are still optimistic in anticipation of a recovery.
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Reviewed by Ellen Johnson
Prosperity Bancshares reports roughly 1.09 B in cash with 550.71 M of positive cash flow from operations. This results in cash-per-share (CPS) ratio of 11.75. The asset utilization indicator refers to the revenue earned for every dollar of assets a company currently reports. Prosperity Bancshares has an asset utilization ratio of 5.04 percent. This suggests that the company is making $0.0504 for each dollar of assets. An increasing asset utilization means that Prosperity Bancshares is more efficient with each dollar of assets it utilizes for everyday operations.
Please note, it is not enough to conduct a financial or market analysis of a single entity such as Prosperity Bancshares. Your research has to be compared to or analyzed against Prosperity Bancshares' peers to derive any actionable benefits. When done correctly, Prosperity Bancshares' 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 Prosperity Bancshares.
Investing in Prosperity Bancshares, 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 Prosperity Bancshares 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 Prosperity Bancshares' 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.
How important is Prosperity Bancshares's Liquidity
Prosperity Bancshares financial leverage refers to using borrowed capital as a funding source to finance Prosperity Bancshares ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. Prosperity Bancshares 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 Prosperity Bancshares' 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 Prosperity Bancshares' 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 Prosperity Bancshares's total debt and its cash.
Prosperity Bancshares Gross Profit
Prosperity Bancshares Gross Profit growth is one of the most critical measures in evaluating the company. The Gross Profit growth rate is calculated simply by comparing Prosperity Bancshares 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 Prosperity Bancshares Gross Profit growth over the last 10 years. Please check Prosperity Bancshares' gross profit and other fundamental indicators for more details.
Prosperity Bancshares Correlation with Peers
Investors in Prosperity can reduce exposure to individual asset risk by holding a diversified portfolio of assets in addition to a long position in Prosperity Bancshares. Diversification will allow for the same portfolio return with reduced risk. The correlation table of Prosperity Bancshares and its peers is a two-dimensional matrix that shows the correlation coefficient between pairs of securities Prosperity 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 Prosperity for more details
Breaking down Prosperity Bancshares Further
Prosperity Bancshares appears to be very steady, given 1 month investment horizon. Prosperity Bancshares maintains Sharpe Ratio (i.e. Efficiency) of 0.18, which implies the firm had 0.18% of return per unit of risk over the last month. Our standpoint towards forecasting 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 Prosperity Bancshares, which you can use to evaluate future volatility of the company. Please employ Prosperity Bancshares Coefficient Of Variation of 676.54, risk adjusted performance of 0.1482, and Semi Deviation of 1.91 to confirm if our risk estimates are consistent with your expectations.
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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 Prosperity Bancshares. Please refer to our Terms of Use for any information regarding our disclosure principles.