Is RPM International (USA Stocks:RPM) low volatility a good sign for investors?

RPM International holds approximately $215.79 million in cash and generates $1.12 billion in positive cash flow from its operations. This translates to a cash-per-share (CPS) ratio of 1.53.

Key Takeaways

Considering RPM International's stock from a volatility perspective, the Coefficient of Variation stands at a high 900.9, indicating significant price fluctuations. Despite this, the Sortino Ratio of 0.0482 suggests that the stock's returns are not adequately compensating for the downside risk, making it a cautious choice for risk-averse investors.
Published over a month ago
View all stories for RPM International | View All Stories
Macroaxis uses a strict editorial review process to publish stories and blog posts. Our publishers support our company and may receive a small commission when the partner links or references are utilized. Commissions do not affect the opinions or evaluations of our editorial team. The information our editors and media partners deliver is confidential and licensed for your sole use as a Macroaxis user. We reserve all rights to the content of this article, and therefore copying or distributing this story in whole or in part is strictly prohibited.

Reviewed by Gabriel Shpitalnik

In the world of investing, timing can be everything. As we approach November, many investors are scrutinizing RPM International's stock to determine if it remains a wise choice. The company, listed on the NYSE and categorized under Basic Materials, has shown some intriguing movements recently. With a Valuation Real Value of $103.84 and a Day Typical Price of $120.36, there's a noticeable gap that could signal potential opportunities or risks. The Analyst Overall Consensus still leans towards a Buy, but the Price Action Indicator at -0.85 and a Daily Balance Of Power at -0.43 suggest a more cautious approach might be warranted. Understanding these dynamics is crucial for making informed decisions about whether RPM International is still a buy this month. Considering a 60-day investment horizon, RPM International is expected to deliver returns that are 2.02 times higher than the market average. However, it is also 2.02 times more volatile than its market benchmark. The stock trades at about 0.13 of its potential returns per unit of risk, compared to the Dow Jones Industrial's 0.14 per unit of risk. While some risk-tolerant investors might overlook current market volatility, it's important to consider the risks associated with investing in RPM International. This year could be different for RPM shareholders. Despite its low volatility, we believe RPM International is currently overvalued, with an estimated real value close to $103.84 per share.
Volatility is a rate at which the price of RPM International 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 RPM International may increase or decrease. In other words, similar to RPM's beta indicator, it measures the risk of RPM International and helps estimate the fluctuations that may happen in a short period of time. So if prices of RPM International 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 RPM International's Liquidity

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

Going after RPM Financials

The recent bullish price patterns experienced by current RPM International shareholders created some momentum for investors as it was traded today as low as 119.43 and as high as 121.55 per share. The company directors and management have been very successful in rebalancing the company assets at opportune times to take advantage of market volatility in September. The stock standard deviation of daily returns for 90 days investing horizon is currently 1.68.
The below-average Stock volatility is a good sign for longer-term investment options and for buy-and-hold investors.
 2021 2022 2023 2024 (projected)
Short Long Term Debt Total3.0B3.0B2.5B2.6B
Total Assets6.7B6.8B6.6B6.9B
In the world of investing, "volatility is the price you pay for performance." RPM International, a player in the Specialty Chemicals industry, demonstrates this with a Beta of 0.99, indicating its stock moves almost in tandem with the market. Despite a modest Five Year Return of 2.00%, the company's strong Current Ratio of 1.99X suggests solid liquidity. However, with an Operating Margin of just 0.14%, potential investors should weigh the stability of its earnings against market fluctuations before making a decision this November..

RPM International has 62 percent chance to decline under $118 in the coming weeks

RPM International's stock has been quite volatile recently, with fluctuations exceeding 2.78. This increased instability indicates a 62% chance that the stock could fall below $118 soon. Investors should be cautious and consider this potential downside when making trading decisions. Despite this, RPM International generally has low volatility, with a skewness of 0.93 and kurtosis of 2.68. Understanding market volatility trends can help investors time their trades better.
Using volatility indicators allows traders to assess RPM International's stock risk against market movements during both up and down markets. Bear markets, in particular, can significantly impact RPM International's stock price, causing stress for investors and often leading them to rebalance their portfolios by purchasing different financial instruments as prices decline.As we look ahead to November, RPM International presents a compelling case for investors. With an analyst consensus rating of "Buy" and a target price estimated at $108, the stock appears to have room for growth. The company's fiscal year ends in May, giving it ample time to capitalize on market opportunities and improve its financial performance. Notably, the valuation market value stands at a robust 120.09, suggesting that the stock is currently trading at a premium. For those considering adding RPM International to their portfolio, the potential upside price of 119.1 offers an attractive incentive..

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 Architect

Editorial Staff

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 Nico Santiago do not own shares of RPM International. 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