In the world of investing, volatility can be both a friend and a foe. Alpine 4 Holdings (NASDAQ: ALPP) has recently shown significant price fluctuations, with a typical daily price around $0.38 and a daily change rate of 0.97%. Despite a strong buy consensus from analysts, the stock's valuation reveals a stark contrast, with a real value of $1.53 and a market value also at $0.38. This discrepancy raises questions about its sustainability. With a possible upside price of $6.78 and a downside risk that could see it drop to $0.0038, shorting ALPP could be tempting for those looking to capitalize on its instability. However, the accumulation distribution figure of 668.72 suggests that there may still be strong buying interest, making this a risky play. Investors should tread carefully, weighing the potential for profit against the inherent risks of such a volatile stock. Alpine 4 Holdings is currently not expected to deliver positive returns and carries a risk level of 6.41% over the next 90 days. While some cautious investors may be overly focused on the machinery sector, it's essential to take a clear look at Alpine 4. We'll explore the risks of investing in this stock right now. Recent risk factors could affect its value, but we believe Alpine 4 is undervalued, with a true worth estimated at around $1.53 per share.
Alpine 4 Holdings (NASDAQ: ALPP) has shown significant volatility, with a standard deviation of 6.18 and a maximum drawdown of 38.33, making it a risky proposition for shorting. With a last price of 0.38 and a negative Treynor Ratio of -0.18, investors should tread carefully as the stock's price action indicates potential instability.
Key Takeaways
Alpine 4 Holdings has liabilities totaling $54.01 million and a debt-to-equity ratio of 0.66, which is fairly typical for companies in its sector. The current ratio stands at 1.46, indicating a solid financial position. It's important to consider the company's debt alongside its cash and equity. With a beta of 0.96, Alpine 4's stock shows moderate volatility, suggesting it may offer some diversification benefits in a portfolio. However, its returns are closely tied to market movements. Currently, Alpine 4 has a negative expected return of -0.29%. Investors should check the company's information ratio, potential upside, and the relationship between potential upside and daily change to gauge whether past performance might be repeated soon.
Volatility is a rate at which the price of Alpine 4 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 Alpine 4 may increase or decrease. In other words, similar to Alpine's beta indicator, it measures the risk of Alpine 4 and helps estimate the fluctuations that may happen in a short period of time. So if prices of Alpine 4 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.
Watch out for price decline
Please consider monitoring Alpine 4 on a daily basis if you are holding a position in it. Alpine 4 is trading at a penny-stock level, and the possibility of delisting is much higher compared to other otcs. However, just because the otc stock is trading under one dollar, does not mean it will be marked for deletion. Most exchanges require public instruments, such as Alpine 4 stock to be traded above the $1 level to remain listed. If Alpine 4 otc stock price falls below $1 for 30 consecutive trading days, the exchange can delist it. Once the company reaches this point, they will be sent an initial price violation notice directly from an exchange.
How important is Alpine 4's Liquidity
Alpine 4 financial leverage refers to using borrowed capital as a funding source to finance Alpine 4 Holdings ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. Alpine 4 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 Alpine 4'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 Alpine 4'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 Alpine 4's total debt and its cash.
How is Alpine allocating its cash?
To perform a cash flow analysis of Alpine 4, investors first need to understand how to read the cash flow statement. A cash flow statement shows the amount of cash Alpine 4 is receiving and how much cash it distributes out in a given period. The Alpine 4 cash flow statement breaks down these inflows and outflows into different buckets, including operating activities, investing activities, and financing activities.
Going after Alpine Financials
The latest Alpine 4 Holdings price fall could raise concerns from retail investors as the firm is trading at a share price of 0.38 on 26,080 in volume. The company executives were unable to exploit market volatilities in August. However, diversifying your overall positions with Alpine 4 Holdings can protect your principal portfolio during market swings. The stock standard deviation of daily returns for 90 days investing horizon is currently 6.41. The very high volatility is mostly attributed to the latest market swings and not very good earnings reports from some of the Alpine 4 partners.In the world of investing, timing can be everything. Alpine 4 Holdings (NASDAQ: ALPP) has recently displayed significant volatility, with a short ratio of 3.12X indicating a growing interest in short selling. The company reported losses with a return on assets of -0.11 and a concerning probability of bankruptcy at 58.40%. Despite a market capitalization of just $10.61 million and a potential upside of 8%, investors should tread carefully, as the stock's beta of 7.6 suggests it is highly sensitive to market movements. With a current valuation of $60.35 million and a target price of $2.25, the risks associated with shorting ALPP could outweigh the potential rewards in this unpredictable environment..
Will Alpine price fall impact its balance sheet?
Alpine 4 Holdings has recently reported a risk-adjusted performance metric of -0.01, indicating that the stock may be struggling to provide returns relative to its risk. This raises concerns for investors about how further price declines could impact the company's financial health. A drop in stock price could limit resources and growth opportunities, questioning Alpine 4's stability in the current market.
The stock is showing above-average volatility and is considered a potential penny stock. While it might offer investment opportunities, many penny stocks are speculative and can be influenced by artificial hype. Investors should be cautious and look for warning signs like spam emails, message board chatter, and unverified promotions. Thoroughly researching the backgrounds of company officers is also essential. Timing your investment can yield profits, but remember that artificially inflated prices often don't last long. True shareholder value comes from solid performance and strong fundamentals.
Our Conclusion on Alpine 4
While some other firms in the conglomerates industry are either recovering or due for a correction, Alpine 4 may not be performing as strong as the other in terms of long-term growth potentials. The inconsistency in the assessment between current Alpine valuation and our trade advice on Alpine 4 is due to the recent market swings and your selection of investing horizon. 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 Alpine 4.
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Ellen Johnson is a Member of Macroaxis Editorial Board. Ellen covers public companies in North America, focusing primarily on valuation and volatility. Six years of experience in predictive investment analytics and risk management. View Profile
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