Will First Bank (NASDAQ:FRBA) current volatility spike continue?
 | By Raphi Shpitalnik | Macroaxis Story |
First Bank is currently generating 0.0444% in daily expected returns and assumes 4.2083% risk (volatility on return distribution) over the 90 days horizon. As many investors are getting excited about financial services space, it is fair to go over First Bank. What exactly are First Bank shareholders getting in August?
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Reviewed by Michael Smolkin
This firm conducts business under Financial Services sector and is part of Banks—Regional industry. Volatility is a rate at which the price of First Bank 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 First Bank may increase or decrease. In other words, similar to First's beta indicator, it measures the risk of First Bank and helps estimate the fluctuations that may happen in a short period of time. So if prices of First Bank 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 First Bank's Liquidity
First Bank financial leverage refers to using borrowed capital as a funding source to finance First Bank ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. First Bank 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 First Bank'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 First Bank'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 First Bank's total debt and its cash.
First Bank Gross Profit
First Bank Gross Profit growth is one of the most critical measures in evaluating the company. The Gross Profit growth rate is calculated simply by comparing First Bank 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 First Bank Gross Profit growth over the last 10 years. Please check First Bank's gross profit and other fundamental indicators for more details.
First Bank Volatility Drivers
First Bank unsystematic risk is unique to First Bank 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 First Bank you can also buy Finward Bancorp. You can also mitigate this risk by investing in the financials 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 First Bank 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 First Bank income statement and balance sheet. Here are more details about First volatility.Click cells to compare fundamentals
Breaking down First Bank Further
The current indifference towards the small price fluctuations of First Bank could raise concerns from investors as the firm closed today at a share price of 6.5 on 10,470 in volume. The company executives did not add any value to First Bank investors in June. However, most investors can still diversify their portfolios with First Bank to hedge their inherited risk against high-volatility market scenarios. The stock standard deviation of daily returns for 30 days investing horizon is currently 4.21. This high volatility is attributed to the latest market swings and not so good earnings reports for some of the First Bank partners.
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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 Raphi Shpitalnik do not own shares of First Bank. Please refer to our Terms of Use for any information regarding our disclosure principles.