Freightcar Story

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RAIL -- USA Stock  

USD 4.91  0.58  10.56%

It appears without question that Freightcar America may not recover as fast as we have hopped for as its price went down 29.14% today. Freightcar America current daily volatility is 7.77 percent, with a beta of 2.32 and an alpha of 0.96 over DOW. As many millenniums are excited about the new volatility, it is fair to summarize Freightcar America based on its historical price patterns. I will address the reasons why this entity does not get much respect from stakeholders under the current market uncertainty.
Published over three weeks ago
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Should you keep an eye on Freightcar America (NASDAQ:RAIL) management before April?
Freightcar America currently holds roughly 54.05 M in cash with (58.91 M) of positive cash flow from operations. This results in cash-per-share (CPS) ratio of 3.47.
The asset utilization indicator refers to the revenue earned for every dollar of assets a company currently reports. Freightcar America has an asset utilization ratio of 26.65 percent. This denotes that the company is making $0.27 for each dollar of assets. An increasing asset utilization means that Freightcar America is more efficient with each dollar of assets it utilizes for everyday operations.
Investing in Freightcar America, 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 Freightcar America 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 Freightcar America'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 Freightcar America 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 Freightcar America. Your research has to be compared to or analyzed against Freightcar America's peers to derive any actionable benefits. When done correctly, Freightcar America'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 Freightcar America.

How important is Freightcar America's Liquidity

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

How Freightcar utilizes its cash?

To perform a cash flow analysis of Freightcar America, investors first need to understand how to read the cash flow statement. A cash flow statement shows the amount of cash Freightcar America is receiving and how much cash it distributes out in a given period. The Freightcar America cash flow statement breaks down these inflows and outflows into different buckets, including operating activities, investing activities, and financing activities.
Freightcar America Net Cash Flow from Operations is relatively stable at the moment as compared to the past year. The company's current value of Net Cash Flow from Operations is estimated at (60.46 Million)

Freightcar America Correlation with Peers

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

Breaking down the case for Freightcar America

Freightcar America is very risky given 1 month investment horizon. Freightcar America secures Sharpe Ratio (or Efficiency) of 0.19, which denotes the company had 0.19% of return per unit of risk over the last month. Our standpoint towards predicting the risk of a stock is to use both market data as well as company specific technical data. We were able to collect and analyze data for twenty-one different technical indicators, which can help you to evaluate if expected returns of 1.48% are justified by taking the suggested risk. Use Freightcar America Coefficient Of Variation of 605.51, downside deviation of 7.08, and Mean Deviation of 5.24 to evaluate company specific risk that cannot be diversified away.
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0.750.860.720.72
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0.720.740.670.8
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Click cells to compare fundamentals   Check Volatility   Backtest Portfolio

Will Freightcar America continue to go bonkers?

The market risk adjusted performance is down to 0.53 as of today. Freightcar America is displaying above-average volatility over the selected time horizon. Investors should scrutinize Freightcar America independently to ensure intended market timing strategies are aligned with expectations about Freightcar America volatility. Understanding different market volatility trends often help investors to time the market. Properly using volatility indicators enable traders to measure Freightcar America'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 Freightcar America'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.

Our Takeaway on Freightcar America Investment

While some firms in the railroads industry are either recovering or due for a correction, Freightcar America may not be performing as strong as the other in terms of long-term growth potentials. On the whole, as of the 27th of March 2021, our research shows that Freightcar America is a rather very risky investment opportunity with a below average probability of distress in the next two years. From a slightly different view, the entity currently appears to be overvalued. Our actual 30 days 'Buy-Sell' recommendation on the company is Hold.

About Contributor

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 Gabriel Shpitalnik do not own shares of Freightcar America. Please refer to our Terms of Use for any information regarding our disclosure principles.

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