REV Story

<div class='circular--portrait' style='background:#FF0F00;color: #FFFFF0;font-size:3em;'>REV</div>
REVG -- USA Stock  

USD 11.64  0.40  3.56%

25% of stocks are less volatile than REV, and 98% of all traded equity instruments are projected to make higher returns than the company over the 90 days investment horizon. While some of us are excited about industrials space, it makes sense to digest REV in greater detail to make a better estimate of its risk and reward. We will cover the possibilities of REV's current volatility to continue through February.
Published over a week ago
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Are you really shorting REV (NYSE:REVG) based on its volatility?
REV Group currently holds roughly 17.3 M in cash with 55.5 M of positive cash flow from operations. This results in cash-per-share (CPS) ratio of 0.27.
Volatility is a rate at which the price of REV 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 REV may increase or decrease. In other words, similar to REV's beta indicator, it measures the risk of REV and helps estimate the fluctuations that may happen in a short period of time. So if prices of REV 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 REV's Liquidity

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

How REV utilizes its cash?

To perform a cash flow analysis of REV, investors first need to understand how to read the cash flow statement. A cash flow statement shows the amount of cash REV is receiving and how much cash it distributes out in a given period. The REV cash flow statement breaks down these inflows and outflows into different buckets, including operating activities, investing activities, and financing activities. REV Net Cash Flow from Operations is projected to decrease significantly based on the last few years of reporting. The past year's Net Cash Flow from Operations was at 50.13 Million

REV Volatility Drivers

REV unsystematic risk is unique to REV Group 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 REV you can also buy EPIROC AB. You can also mitigate this risk by investing in the farm & heavy construction machinery 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 REV 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 REV income statement and balance sheet. Here are more details about REV volatility.
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Click cells to compare fundamentals   

What is driving REV Investor Appetite?

The company reported the previous year's revenue of 2.31 B. Net Loss for the year was (29.3 M) with profit before overhead, payroll, taxes, and interest of 251.8 M.

REV price dip is alarming

The mean deviation is down to 2.35 as of today. REV Group currently demonstrates below-verage downside deviation. It has Information Ratio of 0.03 and Jensen Alpha of 0.03. However, we do advice investors to further question REV Group expected returns to ensure all indicators are consistent with the current outlook about its relatively low value at risk.

Although many other companies in the farm & heavy construction machinery industry are either recovering or due for a correction, REV may not be performing as strong as the other in terms of long-term growth potentials. To conclude, as of the 7th of January 2021, we see that REV responds to the market. The firm is overvalued with below average probability of bankruptcy within the next 24 months. Our present 30 days 'Buy-vs-Sell' recommendation on the firm is Cautious 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 Achuva Shats do not own shares of REV Group. Please refer to our Terms of Use for any information regarding our disclosure principles.

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