Transalta Story

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TAC -- USA Stock  

USD 9.85  0.15  1.55%

Considering the 90-day investment horizon Transalta Corp is expected to generate 2.06 times more return on investment than the market. However, the company is 2.06 times more volatile than its market benchmark. It trades about 0.25 of its potential returns per unit of risk. The DOW is currently generating roughly 0.1 per unit of risk. While some risk-loving traders are indifferent towards current market volatility, it is reasonable to go over the risk of investing in Transalta Corp. We will evaluate if the latest Transalta Corp price volatility suggests a bounce in April. Transalta Corp's very low volatility may have no significant impact on the stock's value as we estimate Transalta Corp as currently overvalued. The real value, based on our calculations, is getting close to 7.85 per share.
Published over a month ago
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Still holding on to Transalta (NYSE:TAC) given current volatility slip?
The entity runs under Utilities sector within Utilities?Independent Power Producers industry.
Volatility is a rate at which the price of Transalta Corp 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 Transalta Corp may increase or decrease. In other words, similar to Transalta's beta indicator, it measures the risk of Transalta Corp and helps estimate the fluctuations that may happen in a short period of time. So if prices of Transalta Corp 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 Transalta Corp's Liquidity

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

How Transalta utilizes its cash?

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

Breaking down Transalta Corp Indicators

The current rise in Transalta Corp short term price appreciation created some momentum for investors as it was traded today as low as 8.71 and as high as 8.93 per share. The company directors and management have successfully maneuvered the company at convenient times to take advantage of all market conditions in February. The stock standard deviation of daily returns for 30 days investing horizon is currently 1.6. The below-average Stock volatility is a good sign for longer-term investment options and for buy-and-hold investors.

Momentum Analysis of Transalta Corp suggests possible reversal in April

Current value at risk indicator falls down to -2.53. Possible price jump?
As of the 3rd of March, Transalta Corp has the Semi Deviation of 1.04, coefficient of variation of 369.75, and Risk Adjusted Performance of 0.2157. In relation to fundamental indicators, the technical analysis model makes it possible for you to check existing technical drivers of Transalta Corp, as well as the relationship between them. In other words, you can use this information to find out if the company will indeed mirror its model of past prices and volume data, or the prices will eventually revert. We are able to interpolate and collect nineteen technical drivers for Transalta Corp, which can be compared to its competition. Please validate Transalta Corp coefficient of variation, maximum drawdown, skewness, as well as the relationship between the information ratio and downside variance to decide if Transalta Corp is priced more or less accurately, providing market reflects its prevalent price of 8.92 per share. Given that Transalta Corp has jensen alpha of 0.3516, we advise you to double-check Transalta Corp's current market performance to make sure the company can sustain itself at a future point.

Our Conclusion on Transalta Corp

Whereas some other firms under the utilities?independent power producers industry are still a bit expensive, Transalta Corp may offer a potential longer-term growth to investors. The inconsistency in the assessment between current Transalta valuation and our trade advice on Transalta Corp is due to the recent market swings and your selection of investing horizon. Please use our equity advice module to run different scenarios to ensure your current risk level and investment horizon are fully reflective of your current investing preferences in regards to Transalta Corp.

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 Transalta Corp. Please refer to our Terms of Use for any information regarding our disclosure principles.

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