GXO Logistics HLNLN Bond
| GXO Stock | USD 49.48 0.27 0.54% |
GXO Logistics holds a debt-to-equity ratio of 1.54. At this time, GXO Logistics' Short and Long Term Debt is very stable compared to the past year. As of the 11th of December 2024, Cash Flow To Debt Ratio is likely to grow to 0.34, while Short and Long Term Debt Total is likely to drop about 3.4 B. With a high degree of financial leverage come high-interest payments, which usually reduce GXO Logistics' Earnings Per Share (EPS).
Asset vs Debt
Equity vs Debt
GXO Logistics' liquidity is one of the most fundamental aspects of both its future profitability and its ability to meet different types of ongoing financial obligations. GXO Logistics' cash, liquid assets, total liabilities, and shareholder equity can be utilized to evaluate how much leverage the Company is using to sustain its current operations. For traders, higher-leverage indicators usually imply a higher risk to shareholders. In addition, it helps GXO Stock's retail investors understand whether an upcoming fall or rise in the market will negatively affect GXO Logistics' stakeholders.
For most companies, including GXO Logistics, marketable securities, inventories, and receivables are the most common assets that could be converted to cash. However, for GXO Logistics, the most critical issue when managing liquidity is ensuring that current assets are properly aligned with current liabilities. If they are not, GXO Logistics' management will need to obtain alternative financing to ensure there are always enough cash equivalents on the balance sheet to meet obligations.
Price Book 1.9138 | Book Value 25.998 | Operating Margin 0.0371 | Profit Margin 0.0097 | Return On Assets 0.0223 |
GXO |
Given the importance of GXO Logistics' capital structure, the first step in the capital decision process is for the management of GXO Logistics to decide how much external capital it will need to raise to operate in a sustainable way. Once the amount of financing is determined, management needs to examine the financial markets to determine the terms in which the company can boost capital. This move is crucial to the process because the market environment may reduce the ability of GXO Logistics to issue bonds at a reasonable cost.
| Popular Name | GXO Logistics HLNLN 4 24 MAR 52 |
| Specialization | Integrated Freight & Logistics |
| Equity ISIN Code | US36262G1013 |
| Bond Issue ISIN Code | US36264FAN15 |
| S&P Rating | Others |
| Maturity Date | Others |
| Issuance Date | Others |
GXO Logistics Outstanding Bond Obligations
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| Boeing Co 2196 | US097023DG73 | Details | |
| HLNLN 3125 24 MAR 25 | US36264NAB01 | Details | |
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| HLNLN 3625 24 MAR 32 | US36264FAM32 | Details | |
| HLNLN 3375 24 MAR 29 | US36264FAL58 | Details | |
| HLNLN 4 24 MAR 52 | US36264FAN15 | Details | |
| HLNLN 3375 24 MAR 27 | US36264FAK75 | Details | |
| MPLX LP 4125 | US55336VAK61 | Details | |
| MPLX LP 52 | US55336VAL45 | Details | |
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| Morgan Stanley 3971 | US61744YAL20 | Details | |
| MGM Resorts International | US552953CD18 | Details | |
| GXO 165 15 JUL 26 | US36262GAB77 | Details | |
| GXO 265 15 JUL 31 | US36262GAD34 | Details |
Understaning GXO Logistics Use of Financial Leverage
Leverage ratios show GXO Logistics' total debt position, including all outstanding obligations. In simple terms, high financial leverage means that the cost of production, along with the day-to-day running of the business, is high. Conversely, lower financial leverage implies lower fixed cost investment in the business, which is generally considered a good sign by investors. The degree of GXO Logistics' financial leverage can be measured in several ways, including ratios such as the debt-to-equity ratio (total debt / total equity), or the debt ratio (total debt / total assets).
| Last Reported | Projected for Next Year | ||
| Short and Long Term Debt Total | 4.1 B | 3.4 B | |
| Net Debt | 3.6 B | 3 B | |
| Long Term Debt | 1.6 B | 1.2 B | |
| Long Term Debt Total | 2 B | 1.1 B | |
| Short and Long Term Debt | 27 M | 47.7 M | |
| Short Term Debt | 1.2 B | 909 M | |
| Net Debt To EBITDA | 5.32 | 3.72 | |
| Debt To Equity | 0.74 | 0.42 | |
| Interest Debt Per Share | 18.56 | 9.93 | |
| Debt To Assets | 0.23 | 0.14 | |
| Long Term Debt To Capitalization | 0.34 | 0.22 | |
| Total Debt To Capitalization | 0.43 | 0.26 | |
| Debt Equity Ratio | 0.74 | 0.42 | |
| Debt Ratio | 0.23 | 0.14 | |
| Cash Flow To Debt Ratio | 0.26 | 0.34 |
Pair Trading with GXO Logistics
One of the main advantages of trading using pair correlations is that every trade hedges away some risk. Because there are two separate transactions required, even if GXO Logistics position performs unexpectedly, the other equity can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in GXO Logistics will appreciate offsetting losses from the drop in the long position's value.Moving against GXO Stock
| 0.67 | PAL | Proficient Auto Logi | PairCorr |
| 0.52 | CRGOW | Freightos Limited | PairCorr |
| 0.47 | EXPD | Expeditors International | PairCorr |
The ability to find closely correlated positions to GXO Logistics could be a great tool in your tax-loss harvesting strategies, allowing investors a quick way to find a similar-enough asset to replace GXO Logistics when you sell it. If you don't do this, your portfolio allocation will be skewed against your target asset allocation. So, investors can't just sell and buy back GXO Logistics - that would be a violation of the tax code under the "wash sale" rule, and this is why you need to find a similar enough asset and use the proceeds from selling GXO Logistics to buy it.
The correlation of GXO Logistics is a statistical measure of how it moves in relation to other instruments. This measure is expressed in what is known as the correlation coefficient, which ranges between -1 and +1. A perfect positive correlation (i.e., a correlation coefficient of +1) implies that as GXO Logistics moves, either up or down, the other security will move in the same direction. Alternatively, perfect negative correlation means that if GXO Logistics moves in either direction, the perfectly negatively correlated security will move in the opposite direction. If the correlation is 0, the equities are not correlated; they are entirely random. A correlation greater than 0.8 is generally described as strong, whereas a correlation less than 0.5 is generally considered weak.
Correlation analysis and pair trading evaluation for GXO Logistics can also be used as hedging techniques within a particular sector or industry or even over random equities to generate a better risk-adjusted return on your portfolios.Check out the analysis of GXO Logistics Fundamentals Over Time. To learn how to invest in GXO Stock, please use our How to Invest in GXO Logistics guide.You can also try the Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
Is Air Freight & Logistics space expected to grow? Or is there an opportunity to expand the business' product line in the future? Factors like these will boost the valuation of GXO Logistics. If investors know GXO will grow in the future, the company's valuation will be higher. The financial industry is built on trying to define current growth potential and future valuation accurately. All the valuation information about GXO Logistics listed above have to be considered, but the key to understanding future value is determining which factors weigh more heavily than others.
Quarterly Earnings Growth (0.50) | Earnings Share 0.89 | Revenue Per Share 92.626 | Quarterly Revenue Growth 0.278 | Return On Assets 0.0223 |
The market value of GXO Logistics is measured differently than its book value, which is the value of GXO that is recorded on the company's balance sheet. Investors also form their own opinion of GXO Logistics' value that differs from its market value or its book value, called intrinsic value, which is GXO Logistics' true underlying value. Investors use various methods to calculate intrinsic value and buy a stock when its market value falls below its intrinsic value. Because GXO Logistics' market value can be influenced by many factors that don't directly affect GXO Logistics' underlying business (such as a pandemic or basic market pessimism), market value can vary widely from intrinsic value.
Please note, there is a significant difference between GXO Logistics' value and its price as these two are different measures arrived at by different means. Investors typically determine if GXO Logistics is a good investment by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, GXO Logistics' price is the amount at which it trades on the open market and represents the number that a seller and buyer find agreeable to each party.
What is Financial Leverage?
Financial leverage is the use of borrowed money (debt) to finance the purchase of assets with the expectation that the income or capital gain from the new asset will exceed the cost of borrowing. In most cases, the debt provider will limit how much risk it is ready to take and indicate a limit on the extent of the leverage it will allow. In the case of asset-backed lending, the financial provider uses the assets as collateral until the borrower repays the loan. In the case of a cash flow loan, the general creditworthiness of the company is used to back the loan. The concept of leverage is common in the business world. It is mostly used to boost the returns on equity capital of a company, especially when the business is unable to increase its operating efficiency and returns on total investment. Because earnings on borrowing are higher than the interest payable on debt, the company's total earnings will increase, ultimately boosting stockholders' profits.Leverage and Capital Costs
The debt to equity ratio plays a role in the working average cost of capital (WACC). The overall interest on debt represents the break-even point that must be obtained to profitability in a given venture. Thus, WACC is essentially the average interest an organization owes on the capital it has borrowed for leverage. Let's say equity represents 60% of borrowed capital, and debt is 40%. This results in a financial leverage calculation of 40/60, or 0.6667. The organization owes 10% on all equity and 5% on all debt. That means that the weighted average cost of capital is (.4)(5) + (.6)(10) - or 8%. For every $10,000 borrowed, this organization will owe $800 in interest. Profit must be higher than 8% on the project to offset the cost of interest and justify this leverage.Benefits of Financial Leverage
Leverage provides the following benefits for companies:- Leverage is an essential tool a company's management can use to make the best financing and investment decisions.
- It provides a variety of financing sources by which the firm can achieve its target earnings.
- Leverage is also an essential technique in investing as it helps companies set a threshold for the expansion of business operations. For example, it can be used to recommend restrictions on business expansion once the projected return on additional investment is lower than the cost of debt.