| 2020 | 2021 | 2022 | 2023 (projected) | Cash and Equivalents | 180.36 M | 191.74 M | 88.85 M | 85.57 M | Total Assets | 1.91 B | 2.64 B | 3.02 B | 2.44 B |
Should you exit Farmers Merchants (USA Stocks:FMAO) after the recent volatility roll up?
 | By Aina Ster | Macroaxis Story |
Farmers Merchants Bancorp (FMAO), a key player in the Banks-Regional industry, has been a topic of interest for investors due to its notable volatility. The company, with a fiscal year end in December, has seen its stock fluctuate, presenting both risks and opportunities for traders. The company's valuation real value stands at $22.16, while its valuation market value is slightly higher at $23.83. The stock's daily balance of power is at a high 2.01, indicating strong buying pressure. Meanwhile, the accumulation distribution stands at a significant 542.06, suggesting that the stock is being heavily accumulated. This could be a sign of bullish sentiment among investors. Analysts have provided a range of target prices for the stock. The lowest estimated target price is $24, while the highest estimated target price reaches up to $26. The average analyst target price estimated value is $25, indicating potential upside from the current levels. However, it's important to note that there are also possible downside risks, with a possible downside price of $20.86. The stock's day typical price is $23.61, slightly above its day median price of $23.49. This, combined with a rate of daily change of 1.07, indicates the stock's price action has been relatively stable. The naive expected forecast value for the stock is $24.58, suggesting potential for growth. In conclusion, Farmers Merchants Bancorp's volatility could present an attractive investment opportunity for those willing to navigate the risks. As always, investors are advised to do their own research and consider their risk tolerance before investing. Considering an investment horizon of 90 days, Farmers Merchants Bancorp is projected to generate a return on investment that is 5.11 times greater than the market. However, it's important to note that the company is also 5.11 times more volatile than its market benchmark. It trades approximately 0.03 of its potential returns per unit of risk, while the Dow Jones Industrial Average is currently generating about 0.09 per unit of risk.
As many traditional traders are steering clear of the banking sector, it's worthwhile to delve deeper into Farmers Merchants Bancorp and try to comprehend its current volatility patterns. We will discuss a few points that insiders of Farmers Merchants should keep in mind regarding its volatility. Despite the apparent stabilization of Farmers Merchants' volatility, it may still influence the stock's value. We currently estimate Farmers Merchants as being fairly valued. Based on our calculations, the real value is nearing $22.16 per share.
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Reviewed by Rifka Kats
Investing in Farmers Merchants Bancorp (FMAO) presents an intriguing opportunity from a volatility viewpoint. The company's Mean Deviation stands at 2.75, indicating a relatively high level of price volatility. This is further confirmed by a Downside Variance of 9.88, which suggests a significant potential for price swings. However, the company's Jensen Alpha, a measure of risk-adjusted performance, is 0.0073. This suggests that despite the high volatility, the stock has been able to generate a positive return after adjusting for the inherent market risk. Investors who are comfortable with high volatility and are able to effectively manage it could find FMAO an attractive investment. However, those who prefer stability may want to exercise caution.
A deeper look at Farmers
Farmers Merchants Bancorp currently holds approximately $75.86 million in cash, with a positive cash flow from operations of $40.67 million. This results in a cash-per-share (CPS) ratio of 5.62.Volatility is a rate at which the price of Farmers Merchants 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 Farmers Merchants may increase or decrease. In other words, similar to Farmers's beta indicator, it measures the risk of Farmers Merchants and helps estimate the fluctuations that may happen in a short period of time. So if prices of Farmers Merchants 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 Farmers Merchants's Liquidity
Farmers Merchants financial leverage refers to using borrowed capital as a funding source to finance Farmers Merchants Bancorp ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. Farmers Merchants 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 Farmers Merchants' 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 Farmers Merchants' 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 Farmers Merchants's total debt and its cash.
Farmers Merchants Gross Profit
Farmers Merchants Gross Profit growth is one of the most critical measures in evaluating the company. The Gross Profit growth rate is calculated simply by comparing Farmers Merchants 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 Farmers Merchants Gross Profit growth over the last 10 years. Please check Farmers Merchants' gross profit and other fundamental indicators for more details.
Farmers Merchants Volatility Drivers
Farmers Merchants unsystematic risk is unique to Farmers Merchants Bancorp 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 Farmers Merchants you can also buy Southern California 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 Farmers Merchants 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 Farmers Merchants income statement and balance sheet. Here are more details about Farmers volatility.Click cells to compare fundamentals
Breaking down Farmers Merchants Indicators
The recent indifference towards the small price fluctuations of Farmers Merchants Bancorp could raise concerns from insiders as the firm is trading at a share price of 23.83 on 16,811 in volume. The company executives did not add any value to Farmers Merchants investors in June. However, most investors can still diversify their portfolios with Farmers Merchants Bancorp to hedge their inherited risk against high-volatility market scenarios. The stock standard deviation of daily returns for 90 days investing horizon is currently 3.73. The above-average risk is mostly attributed to market volatility and speculations regarding some of the upcoming earning calls from Farmers Merchants partners.
Farmers Merchants Bancorp (FMAO), a NASDAQ-listed regional bank in the Financial Services category, has shown promising volatility metrics, presenting an intriguing investment opportunity. The company's variance stands at 12.57 and semi variance at 9.23, suggesting a potential for substantial price swings and opportunities for profit. The skewness of 0.7689 indicates a relatively symmetrical distribution of returns, reducing the risk of extreme losses. The company's net asset is $3.02 billion and it reported a gross profit of $97.72 million.The low debt to equity ratio of 7.24% and retained earnings of $212.45 million reflect a strong financial position. The stock has a beta of 0.44, suggesting lower market risk compared to the broader market. The five-year return stands at a modest 2.18%, with a potential upside of 6.47. Despite these positive indicators, investors should be aware of the company's risk metrics. The maximum drawdown is 20.6, and the value at risk stands at -4.52, suggesting potential for significant losses. The probability of bankruptcy is also a considerable 42.47%. However, the company's robust operating margin of 0.42% and a price to earnings ratio of 14.82X suggest operational efficiency and reasonable valuation. In conclusion, Farmers Merchants Bancorp presents an attractive opportunity for risk-tolerant investors seeking to capitalize on stock volatility, provided they are comfortable with the associated risks. The company's strong financial health and operational efficiency, combined with its market volatility, make it a stock to watch. .
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