First American has roughly 1.23
B in cash with 1.22
B of positive cash flow from operations. This results in cash-per-share (CPS) ratio of 23.39.
The asset utilization indicator refers to the revenue earned for every dollar of assets a company currently reports. First American has an asset utilization ratio of 56.01 percent. This implies that the company is making $0.56 for each dollar of assets. An increasing asset utilization means that First American is more efficient with each dollar of assets it utilizes for everyday operations.
Investing in First American, just like investing in any other equity instrument, is characterized by a strong risk-return correlation. High risks mean high returns and low risk means lower expected returns. Risk management is the act of identifying and assessing the potential risk and developing strategies to minimize these risks and earn maximum possible profits while holding First American along with other instruments in the same portfolio. Using conventional
technical analysis and
fundamental analysis to select individual securities into a portfolio complements risk management and adds value to overall investors' investing strategies.
Sophisticated investors, who have witnessed
many market ups and downs, anticipate that the market will even out over time. This tendency of First American's price to converge to an average value over time is called mean reversion. However, historically, high market prices usually discourage investors that believe in mean reversion to invest, while low prices are viewed as an opportunity to buy.
Please note, it is not enough to conduct a financial or market analysis of a single entity such as First American. Your research has to be compared to or analyzed against First American's peers to derive any actionable benefits. When done correctly, First American's competitive analysis will give you plenty of quantitative and qualitative data to validate your investment decisions or develop an entirely new strategy toward taking a position in First American.
How important is First American's Liquidity
First American
financial leverage refers to using borrowed capital as a funding source to finance First American ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. First American 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 American'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 American'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 American's total debt and its cash.
First American Gross Profit
First American 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 American 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 American Gross Profit growth over the last 10 years. Please check First American's
gross profit and other
fundamental indicators for more details.
First American Correlation with Peers
Investors in First can reduce exposure to individual asset risk by holding a diversified portfolio of assets in addition to a long position in First American. Diversification will allow for the same portfolio return with reduced risk. The correlation table of First American and its peers is a two-dimensional matrix that shows the correlation coefficient between pairs of securities First is related in some way. The cells in the table are color-coded to highlight significantly positive and negative relationships. Each cell shows the correlation between one pair of equities and can be used to run pair trading strategies or create efficient portfolios with
your current brokerage. Please check
volatility of First for more details
Breaking down First American Indicators
First American appears to be very steady, given 3 months investment horizon.
First American secures Sharpe Ratio (or Efficiency) of 0.12, which denotes the company had 0.12% of return per unit of risk over the last 3 months. Our standpoint towards predicting the volatility of a stock is to use all available market data together with stock-specific
technical indicators that cannot be
diversified away. We have found twenty-one
technical indicators for First American, which you can use to evaluate the future volatility of the firm. Please utilize First American's Downside Deviation of 1.68,
coefficient of variation of 559.37, and Mean Deviation of 1.62 to check if our risk estimates are consistent with your expectations.
First American is likely to close below USD63 next week
First American current risk adjusted performance boosts over 0.19. First American has relatively low volatility with skewness of 1.03 and kurtosis of 3.22. However, we advise all investors to independently investigate First American to ensure all accessible information is consistent with the expectations about its upside potential and future expected returns. Understanding different market volatility trends often help investors to time the market. Properly using volatility indicators enable traders to measure First American's stock risk against market volatility during both bullish and bearish trends. The higher level of volatility that comes with bear markets can directly impact First American'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 Takeaway on First American Investment
While many other companies under the insurance—specialty industry are still a bit expensive, First American may offer a potential longer-term growth to stockholders. With an optimistic outlook on your 90 days horizon, it may be a good time to buy new shares of First or increase your existing holdings in the Stock as it seems the potential growth has not yet been fully factored into the current price. 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 First American.
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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 First American. Please refer to our
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