Will your portfolio survive without Toro (NYSE:TTC)?
 | By Rifka Kats | Macroaxis Story |
Considering the 60-days investment horizon, Toro is expected to generate 1.04 times more return on investment than the market. However, the company is 1.04 times more volatile than its market benchmark. It trades about 0.08 of its potential returns per unit of risk. The DOW is currently generating roughly 0.09 per unit of risk. As many conservative investors are still indifferent towards current market risk, it is prudent, from our point of view, to go over Toro's current volatility. We will go over a few points Toro investors should remember regarding its volatility. Toro's very low volatility may have no significant impact on the stock's value as we estimate Toro as currently overvalued. The real value, based on our calculations, is getting close to 67.98 per share.
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Reviewed by Michael Smolkin
Toro Company has roughly 200 M in cash with 244.27 M of positive cash flow from operations. This results in cash-per-share (CPS) ratio of 1.87. Volatility is a rate at which the price of Toro 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 Toro may increase or decrease. In other words, similar to Toro's beta indicator, it measures the risk of Toro and helps estimate the fluctuations that may happen in a short period of time. So if prices of Toro 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 Toro's Liquidity
Toro financial leverage refers to using borrowed capital as a funding source to finance Toro Co ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. Toro 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 Toro'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 Toro'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 Toro's total debt and its cash.
Toro Gross Profit
Toro Gross Profit growth is one of the most critical measures in evaluating the company. The Gross Profit growth rate is calculated simply by comparing Toro previous period's values with its current period's values. Each time period you're measuring should be of equal lengths the increase or decrease, in a company's Gross Profit between two periods. Here we show Toro Gross Profit growth over the last 10 years. Please check Toro's gross profit and other fundamental indicators for more details.
Toro Volatility Drivers
Toro unsystematic risk is unique to Toro 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 Toro you can also buy Timken Company. You can also mitigate this risk by investing in the industrials 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 Toro 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 Toro income statement and balance sheet. Here are more details about Toro volatility.Click cells to compare fundamentals
Detailed Perspective On Toro
The modest gains experienced by current holders of Toro Company created some momentum for investors as it was traded today as low as 77.68 and as high as 78.93 per share. The company management teams have been quite successful in maneuvering the stock at opportune times to take advantage of all market conditions in August. The stock standard deviation of daily returns for 30 days investing horizon is currently 1.44. The below-average Stock volatility is a good sign for longer-term investment options and for buy-and-hold investors.
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