The company has a beta of 2.6056. Let's try to break down what Ruths's beta means in this case. As the market goes up, the company is expected to outperform it. However, if the market returns are negative, Ruths Hospitality will likely underperform. The beta indicator helps investors understand whether Ruths Hospitality moves in the same direction as the rest of the market, and how volatile (i.e., risky) it is compared to the market (i.e., selected benchmark). In other words, if Ruths deviates very little from the market, it does not add much risk to the portfolio, but it also doesn't increase the expected returns.
How important is Ruths Hospitality's Liquidity
Ruths Hospitality
financial leverage refers to using borrowed capital as a funding source to finance Ruths Hospitality Group ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. Ruths Hospitality 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 Ruths Hospitality'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 Ruths Hospitality'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 Ruths Hospitality's total debt and its cash.
Detailed Perspective On Ruths Hospitality
The big decline in price over the last few months for Ruths Hospitality created some momentum for stockholders as it was traded today as low as
19.59 and as high as
20.2 per share. The company directors and management failed to add value to investors and positioning the company supply of money to exploit market volatility in
July. However, diversifying your holdings with Ruths Hospitality or any similar stocks can still protect your portfolios during high-volatility market scenarios. The stock standard deviation of daily returns for 90 days investing horizon is currently 3.0. The above-average risk is mostly attributed to market volatility and speculations regarding some of the upcoming earning calls from Ruths Hospitality partners.
Returns Breakdown
| Return on Investment | 32.73 |
| Return on Assets | 11.05 |
| Return on Equity | 30.33 |
| Return Capital | 0.24 |
| Return on Sales | 0.13 |
Will Ruths continue to rise?
Current Risk Adjusted Performance is up to -0.09. Price may drop again. Ruths Hospitality exhibits very low volatility with skewness of 0.23 and kurtosis of 1.28. However, we advise investors to further study Ruths Hospitality technical indicators to make sure all market info is available and is reliable. Understanding different market volatility trends often help investors to time the market. Properly using volatility indicators enable traders to measure Ruths Hospitality's stock risk against market volatility during both bullying and bearish trends. The higher level of volatility that comes with bear markets can directly impact Ruths Hospitality's stock price while adding stress to investors as they watch their shares' value plummet. This usually forces investors to rebalance their portfolios by buying different stocks as prices fall.
Our Final Perspective on Ruths Hospitality
While other entities in the restaurants industry are either recovering or due for a correction, Ruths Hospitality may not be performing as strong as the other in terms of long-term growth potentials. In closing, as of the 6th of August 2021, we believe that at this point, Ruths Hospitality is not too volatile with
below average chance of financial distress within the next 2 years. From a slightly different point of view, the entity appears to be
undervalued. Our up-to-date 90 days buy vs. sell advice on the company is
Strong Hold.
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Rifka Kats is a Member of Macroaxis Editorial Board. Rifka writes about retail product and service companies from the perspective of a regular consumer and sophisticated investor at the same time. She is passionate about corporate ethics and equality in the workforce.
View Profile 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 Rifka Kats do not own shares of Ruths Hospitality Group. Please refer to our
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