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When should you exit your Ramaco Resources (USA Stocks:METC) holdings?

June 26, 2024  By Vlad Skutelnik
Macroaxis Story
The early bird catches the worm, and in the case of Ramaco Resources (NASDAQ: METC), timing is everything. This coking coal company, part of the basic materials industry, has been making waves in the NASDAQ exchange. With a strong buy consensus from analysts and a possible upside price of $14.63, it's clear that Ramaco Resources is a stock to watch. However, strategic investment analysis is key, as the company's valuation real value stands at $10.58, slightly below the day's typical price of $11.99. The rate of daily change is 1.03, indicating a dynamic market situation. The question remains: when is the optimal time to trade your Ramaco Resources stock? Let's delve deeper into the analysis. We use predictive indicators to assess Ramaco Resources, assisting investors in analyzing its daily demand, supply, volume, patterns, and price fluctuations to determine its real value. Various methods are applied to calculate Ramaco's intrinsic value based on widely used predictive technical indicators. Today's article will delve into Ramaco Resources, exploring why investors may still consider investing in the company.
Published over three months ago
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Reviewed by Michael Smolkin

Despite a negative Jensen Alpha of -0.46 and a Total Risk Alpha of -0.29, indicating potential underperformance, Ramaco Resources (NASDAQ: METC) stock still holds potential upside of 3.86%. With a recent price change of 0.39 and a high price of $12.25, strategic timing and careful analysis could yield significant returns for savvy investors in the coking coal industry.

Key Takeaways

Ramaco Resources holds a strong buy rating from four analysts. Our trading recommendation tool can cross-check this consensus to evaluate the company's growth potential in the current economic cycle. However, the company's profit margin stands at a mere 0.08%, indicating that even a minor decline in revenue could result in a net loss. This is significantly below average. The operating margin of 0.02% suggests that for every $100 of sales, it generated a net operating income of $0.02.
The successful prediction of Ramaco Resources stock price could yield a significant profit to investors. But is it possible? The efficient-market hypothesis suggests that all published stock prices of traded companies, such as Ramaco Resources, already reflect all publicly available information. This academic statement is a fundamental principle of many financial and investing theories used today. However, the typical investor usually disagrees with a 'textbook' version of this hypothesis and continually tries to find mispriced stocks to increase returns. We use internally-developed statistical techniques to arrive at the intrinsic value of Ramaco Resources based on Ramaco Resources hews, social hype, general headline patterns, and widely used predictive technical indicators. We also calculate exposure to Ramaco Resources's market risk, different technical and fundamental indicators, relevant financial multiples and ratios, and then comparing them to Ramaco Resources's related companies.

Use Technical Analysis to project Ramaco expected Price

Ramaco Resources technical stock analysis exercises models and trading practices based on price and volume transformations, such as the moving averages, relative strength index, regressions, price and return correlations, business cycles, stock market cycles, or different charting patterns.
Overlap Analysis
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Forecast Models
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Price Shifting
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Volatility Indicators
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Value Movement
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A focus of Ramaco Resources technical analysis is to determine if market prices reflect all relevant information impacting that market. A technical analyst looks at the history of Ramaco Resources trading pattern rather than external drivers such as economic, fundamental, or social events. It is believed that price action tends to repeat itself due to investors' collective, patterned behavior. Hence technical analysis focuses on identifiable price trends and conditions. More Info...

How important is Ramaco Resources's Liquidity

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

Ramaco Resources Gross Profit

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

Detailed Perspective On Ramaco Resources

The company reported the previous year's revenue of 693.52 M. Net Income was 82.31 M with profit before overhead, payroll, taxes, and interest of 232.73 M.
 2021 2022 2023 2024 (projected)
Short Long Term Debt Total51.4M138.1M100.6M105.6M
Total Assets329.0M596.3M665.8M699.1M
Short Long Term Debt TotalTotal Assets

Current Deferred Revenue Breakdown

Ramaco Resources' Current Deferred Revenue is increasing over the years with slightly volatile fluctuation. Current Deferred Revenue is expected to dwindle to about 15.9 M. Current Deferred Revenue usually refers to revenue that has been collected but not yet earned, typically from prepaid service contracts or subscriptions. This amount is considered a liability until the service is provided or the subscription period ends. At present, Ramaco Resources' Current Deferred Revenue is projected to increase significantly based on the last few years of reporting.
2010
2020
2021
2023
2024
201011.76 Million
202011.64 Million
202119.9 Million
202322.88 Million
202415.87 Million
Time is money, and in the case of Ramaco Resources (NASDAQ: METC), timing is everything. With a market capitalization of $615.86M and a positive daily balance of power at 0.65, the company shows potential for growth. However, the stock's high variance of 11.73 and standard deviation of 3.43 suggest a significant level of risk. Despite this, the company's strong gross profit of $232.73M and retained earnings of $91.94M indicate a solid financial foundation. Therefore, while the timing for trading Ramaco Resources stock requires careful consideration due to its volatility, its robust financial health makes it a potentially rewarding investment.

Will Ramaco Resources latest surge continue?

Despite Ramaco Resources' recent stock surge, its Treynor Ratio has fallen to -2.39, potentially worrying investors. This performance metric measures risk-adjusted returns, and a negative figure typically implies the stock may not be rewarding investors sufficiently for its risk. This could suggest a future price drop, casting doubt on the stock's recent surge. Investors should closely monitor this. Ramaco Resources has very low volatility, with a skewness of -1.85 and kurtosis of 7.52. Understanding market volatility trends can help investors time the market.
Using volatility indicators correctly can measure Ramaco Resources' stock risk against market volatility during both bullish and bearish trends. The increased volatility in bear markets can directly affect Ramaco Resources' stock price and add stress to investors as they see their shares' value decline, often prompting them to rebalance their portfolios by purchasing different financial instruments as prices drop.Despite a modest market dip, Ramaco Resources (METC) has managed to climb over 3 percent, demonstrating its resilience and potential for growth. The company's current valuation market value stands at $12.08, with a possible upside price of $14.63, suggesting a promising future for investors. Analysts have a strong buy consensus on the stock, backed by three strong buy recommendations. The analyst target price estimated value is $10.25, which is lower than the current market value, indicating the stock is trading at a premium. However, the naive expected forecast value is $11.13, which is closer to the current market value, providing a more optimistic outlook. Given these factors, investing in Ramaco Resources could offer substantial returns for investors..

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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 Ramaco Resources. Please refer to our Terms of Use for any information regarding our disclosure principles.

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