Macroaxis Stories

Will Teekay Shipping (NYSE:TK) recent volatility spike continue?

March 27, 2021  By Vlad Skutelnik
Macroaxis Story
39% of stocks are less risky than Teekay on the basis of their historical return distribution, and some 85% of all equities are expected to be superior in generating returns on investments over the next 90 days. While some risk-loving traders are indifferent towards current market volatility, it is reasonable to examine the risk of investing in Teekay Shipping Corp. What exactly are Teekay Shipping shareholders getting in April? The recent above-average Teekay Shipping's volatility may impact the value of the stock as we project Teekay Shipping as currently undervalued. The real value, according to our calculations, is approaching 4.74 per share.
Published over a year ago
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Reviewed by Michael Smolkin

Teekay Shipping Corp is active under Energy sector as part of Oil & Gas Midstream industry.
Volatility is a rate at which the price of Teekay 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 Teekay may increase or decrease. In other words, similar to Teekay's beta indicator, it measures the risk of Teekay and helps estimate the fluctuations that may happen in a short period of time. So if prices of Teekay 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 Teekay's Liquidity

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

How does Teekay utilize its cash?

At this time, Teekay's Depreciation is quite stable compared to the past year. . To perform a cash flow analysis of Teekay, investors first need to understand how to read the cash flow statement. A cash flow statement shows the amount of cash Teekay is receiving and how much cash it distributes out in a given period. The Teekay cash flow statement breaks down these inflows and outflows into different buckets, including operating activities, investing activities, and financing activities.

Teekay Gross Profit

Teekay Gross Profit growth is one of the most critical measures in evaluating the company. The Gross Profit growth rate is calculated simply by comparing Teekay 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 Teekay Gross Profit growth over the last 10 years. Please check Teekay's gross profit and other fundamental indicators for more details.

Teekay Volatility Drivers

Teekay unsystematic risk is unique to Teekay 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 Teekay you can also buy Teekay Tankers. You can also mitigate this risk by investing in the energy 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 Teekay 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 Teekay income statement and balance sheet. Here are more details about Teekay volatility.
Total Assets
Net Debt
Total Liab
Common Stock
Total Assets
0.971.00.04
Net Debt
0.970.98-0.04
Total Liab
1.00.98-0.02
Common Stock
0.04-0.04-0.02
Click cells to compare fundamentals

A Deeper Perspective On Teekay

The entity generated the yearly revenue of 1.82 B. Annual Net Loss to common stockholders was (82.93 M) with gross profit of 820.95 M.

Our perspective of the recent Teekay Shipping surge

The downside variance is down to 16.39 as of today. Teekay Shipping Corp shows above-average downside volatility for the selected time horizon. We advise investors to inspect Teekay Shipping Corp further and ensure that all market timing and asset allocation strategies are consistent with the estimation of Teekay Shipping future alpha. Understanding different market volatility trends often help investors to time the market. Properly using volatility indicators enable traders to measure Teekay Shipping'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 Teekay Shipping'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 Bottom Line On Teekay Shipping Corp

Although some other companies within the oil & gas midstream industry are still a little expensive, even after the recent corrections, Teekay Shipping may offer a potential longer-term growth to traders. On the whole, as of the 27th of March 2021, we believe that at this point, Teekay Shipping is undervalued with below average odds of financial turmoil within the next 2 years. Our concluding 'Buy-Sell' recommendation on the firm is Cautious Hold.

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Editorial Staff

Vlad Skutelnik is a Macroaxis Contributor. Vlad covers stocks, funds, cryptocurrencies, and ETFs that are traded in North America, focusing primarily on fundamentals, valuation and market volatility. He has many years of experience in fintech, predictive investment analytics, and risk management. 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 Vlad Skutelnik do not own shares of Teekay. Please refer to our Terms of Use for any information regarding our disclosure principles.

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