Preferred Story

PFBC -- USA Stock

USD 58.49 0.49 0.83%

Macroaxis Story

It appears Preferred Bank may not recover as fast as we have hopped for as its price went down 2.63% today. Preferred Bank current daily volatility is 2.96 percent, with a beta of 0.15 and an alpha of 0.64 over DOW. As many baby boomers are still indifferent towards current volatility, Preferred Bank. What exactly are Preferred Bank shareholders getting in February?

Published over a month ago

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Is Preferred Bank (NASDAQ:PFBC) stock way too aggressive for baby boomers?

Preferred Bank currently holds roughly 807.79 M in cash with 89.02 M of positive cash flow from operations. This results in cash-per-share (CPS) ratio of 54.23, which can makes it an attractive takeover target, given it will continue generating positive cash flow.

Investing in Preferred Bank, 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 Preferred Bank 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, frequently view the market will even out over time. This tendency of Preferred Bank's stock 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 use the tools below to analyze the current value of Preferred Bank in the context of predictive analytics.

Please note, it is not enough to conduct a financial or market analysis of a single entity such as Preferred Bank. Your research has to be compared to or analyzed against Preferred Bank's peers to derive any actionable benefits. When done correctly, Preferred Bank's competitive analysis will give you plenty of quantitative and qualitative data to validate your investment decisions or develop an entirely new strategy towards taking a position in Preferred Bank LA.

How important is Preferred Bank's Liquidity

Preferred Bank financial leverage refers to using borrowed capital as a funding source to finance Preferred Bank LA ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. Preferred Bank 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. Please check the breakdown between Preferred Bank's total debt and its cash.

How Preferred utilizes its cash?

To perform a cash flow analysis of Preferred Bank, investors first need to understand how to read the cash flow statement. A cash flow statement shows the amount of cash Preferred Bank is receiving and how much cash it distributes out in a given period. The Preferred Bank cash flow statement breaks down these inflows and outflows into different buckets, including operating activities, investing activities, and financing activities.

Preferred Bank Net Cash Flow from Operations is projected to increase significantly based on the last few years of reporting. The past year's Net Cash Flow from Operations was at 78.08 Million

Preferred Bank Correlation with Peers

Investors in Preferred can reduce exposure to individual asset risk by holding a diversified portfolio of assets in addition to a long position in Preferred Bank LA. Diversification will allow for the same portfolio return with reduced risk. The correlation table of Preferred Bank and its peers is a two-dimensional matrix that shows the correlation coefficient between pairs of securities Preferred 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 Preferred for more details

What is driving Preferred Bank Investor Appetite?

Preferred Bank appears to be very steady, given 1 month investment horizon. Preferred Bank maintains Sharpe Ratio (i.e. Efficiency) of 0.22, which implies the firm had 0.22% 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. By analyzing Preferred Bank technical indicators you can presently evaluate if the expected return of 0.64% is justified by implied risk. Please employ Preferred Bank Risk Adjusted Performance of 0.2333, semi deviation of 1.83, and Coefficient Of Variation of 423.22 to confirm if our risk estimates are consistent with your expectations.

	PNC	SBRCY	TFC	USB	HDB
PNC		0.93	0.87	0.96	0.93	PNC
SBRCY	0.93		0.79	0.91	0.88	SBRCY
TFC	0.87	0.79		0.91	0.92	TFC
USB	0.96	0.91	0.91		0.92	USB
HDB	0.93	0.88	0.92	0.92		HDB
	PNC	SBRCY	TFC	USB	HDB

Click cells to compare fundamentals

Check Volatility

Backtest Portfolio

Will Preferred slip impact its fundamentals?

Kurtosis is down to 3.32. It may suggest a possible volatility slip. Preferred Bank currently demonstrates below-verage downside deviation. It has Information Ratio of 0.17 and Jensen Alpha of 0.64. However, we do advice investors to further question Preferred Bank expected returns to ensure all indicators are consistent with the current outlook about its relatively low value at risk.

Our Final Takeaway

Whereas some firms under the banks?regional industry are still a bit expensive, Preferred Bank may offer a potential longer-term growth to investors. To conclude, as of the 25th of January 2021, we believe Preferred Bank is currently undervalued. It barely shadows the market and projects below average odds of distress in the next two years. Our up-to-date 30 days advice on the company is Strong Buy.

About Contributor

Raphi Shpitalnik is a Junior Member of Macroaxs Editorial Board. Raphael is a young entrepreneur who joined Macroaxis on a part-time base at the beginning of the pandemic and eventually acquired a real test for investing and fintech. He likes to analyze different equity instruments across a wide range of industries, focusing primarily on consumer products, sports, fintech, cannabis, and AI. 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 Raphi Shpitalnik do not own shares of Preferred Bank LA. Please refer to our Terms of Use for any information regarding our disclosure principles.

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Preferred Story

USD 58.49 0.49 0.83%

How important is Preferred Bank's Liquidity

How Preferred utilizes its cash?

Preferred Bank Correlation with Peers

What is driving Preferred Bank Investor Appetite?

Will Preferred slip impact its fundamentals?

Our Final Takeaway

About Contributor

Would you like to provide feedback on the content of this article?

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