Angel Oak Debt

AOMR Stock  USD 9.48  0.18  1.86%   
Angel Oak Mortgage has over 1.65 Billion in debt which may indicate that it relies heavily on debt financing. At this time, Angel Oak's Short Term Debt is relatively stable compared to the past year. As of 12/05/2024, Net Debt To EBITDA is likely to grow to 16.59, while Net Debt is likely to drop slightly above 1 B. . Angel Oak's financial risk is the risk to Angel Oak stockholders that is caused by an increase in debt.

Asset vs Debt

Equity vs Debt

Angel Oak's liquidity is one of the most fundamental aspects of both its future profitability and its ability to meet different types of ongoing financial obligations. Angel Oak's 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 Angel Stock's retail investors understand whether an upcoming fall or rise in the market will negatively affect Angel Oak's stakeholders.

Angel Oak Quarterly Net Debt

1.69 Billion

For most companies, including Angel Oak, marketable securities, inventories, and receivables are the most common assets that could be converted to cash. However, for Angel Oak Mortgage, the most critical issue when managing liquidity is ensuring that current assets are properly aligned with current liabilities. If they are not, Angel Oak's management will need to obtain alternative financing to ensure there are always enough cash equivalents on the balance sheet to meet obligations.
Price Book
0.8567
Book Value
11.275
Operating Margin
0.8991
Profit Margin
0.7667
Return On Assets
0.0315
Given that Angel Oak's debt-to-equity ratio measures a Company's obligations relative to the value of its net assets, it is usually used by traders to estimate the extent to which Angel Oak is acquiring new debt as a mechanism of leveraging its assets. A high debt-to-equity ratio is generally associated with increased risk, implying that it has been aggressive in financing its growth with debt. Another way to look at debt-to-equity ratios is to compare the overall debt load of Angel Oak to its assets or equity, showing how much of the company assets belong to shareholders vs. creditors. If shareholders own more assets, Angel Oak is said to be less leveraged. If creditors hold a majority of Angel Oak's assets, the Company is said to be highly leveraged.
As of 12/05/2024, Total Current Liabilities is likely to grow to about 925.5 M, while Liabilities And Stockholders Equity is likely to drop slightly above 1.9 B.
  
Check out the analysis of Angel Oak Fundamentals Over Time.

Angel Oak Bond Ratings

Angel Oak Mortgage financial ratings play a critical role in determining how much Angel Oak have to pay to access credit markets, i.e., the amount of interest on their issued debt. The threshold between investment-grade and speculative-grade ratings has important market implications for Angel Oak's borrowing costs.
Piotroski F Score
8
StrongView
Beneish M Score
(3.42)
Unlikely ManipulatorView

Angel Oak Mortgage Debt to Cash Allocation

Many companies such as Angel Oak, eventually find out that there is only so much market out there to be conquered, and adding the next product or service is only half as profitable per unit as their current endeavors. Eventually, the company will reach a point where cash flows are strong, and extra cash is available but not fully utilized. In this case, the company may start buying back its stock from the public or issue more dividends.
Angel Oak Mortgage currently holds 1.65 B in liabilities with Debt to Equity (D/E) ratio of 7.63, indicating the company may have difficulties to generate enough cash to satisfy its financial obligations. Angel Oak Mortgage has a current ratio of 1.17, suggesting that it is in a questionable position to pay out its financial obligations when due. Note, when we think about Angel Oak's use of debt, we should always consider it together with its cash and equity.

Angel Oak Total Current Liabilities Over Time

Angel Oak Assets Financed by Debt

The debt-to-assets ratio shows the degree to which Angel Oak uses debt to finance its assets. It includes both long-term and short-term borrowings maturing within one year. It also includes both tangible and intangible assets, such as goodwill.

Angel Oak Debt Ratio

    
  55.0   
It seems slightly above 44% of Angel Oak's assets are financed be debt. Typically, companies with high debt-to-asset ratios are said to be highly leveraged. The higher the ratio, the greater risk will be associated with the Angel Oak's operation. In addition, a high debt-to-assets ratio may indicate a low borrowing capacity of Angel Oak, which in turn will lower the firm's financial flexibility.

Angel Oak Corporate Bonds Issued

Angel Short Long Term Debt Total

Short Long Term Debt Total

1.1 Billion

At this time, Angel Oak's Short and Long Term Debt Total is relatively stable compared to the past year.

Understaning Angel Oak Use of Financial Leverage

Angel Oak's financial leverage ratio measures its total debt position, including all of its outstanding liabilities, and compares it to Angel Oak's current equity. If creditors own a majority of Angel Oak's assets, the company is considered highly leveraged. Understanding the composition and structure of Angel Oak's outstanding bonds gives an idea of how risky it is and if it is worth investing in.
Last ReportedProjected for Next Year
Short and Long Term Debt Total1.7 B1.1 B
Net Debt1.4 BB
Long Term Debt1.5 B1.1 B
Short Term Debt484.3 M533.9 M
Long Term Debt Total903.1 M802.8 M
Net Debt To EBITDA 15.80  16.59 
Debt To Equity 6.46  4.44 
Interest Debt Per Share 69.59  73.07 
Debt To Assets 0.72  0.55 
Long Term Debt To Capitalization 0.82  0.51 
Total Debt To Capitalization 0.87  0.55 
Debt Equity Ratio 6.46  4.44 
Debt Ratio 0.72  0.55 
Cash Flow To Debt Ratio 0.19  0.19 
Please read more on our technical analysis page.

Pair Trading with Angel Oak

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 Angel Oak 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 Angel Oak will appreciate offsetting losses from the drop in the long position's value.

Moving against Angel Stock

  0.79AB AllianceBernsteinPairCorr
  0.73CG Carlyle GroupPairCorr
  0.71AC Associated CapitalPairCorr
  0.64TW Tradeweb MarketsPairCorr
  0.59SF Stifel Financial Fiscal Year End 22nd of January 2025 PairCorr
The ability to find closely correlated positions to Angel Oak could be a great tool in your tax-loss harvesting strategies, allowing investors a quick way to find a similar-enough asset to replace Angel Oak 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 Angel Oak - 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 Angel Oak Mortgage to buy it.
The correlation of Angel Oak 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 Angel Oak moves, either up or down, the other security will move in the same direction. Alternatively, perfect negative correlation means that if Angel Oak Mortgage 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 Angel Oak 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.
Pair CorrelationCorrelation Matching

Additional Tools for Angel Stock Analysis

When running Angel Oak's price analysis, check to measure Angel Oak's market volatility, profitability, liquidity, solvency, efficiency, growth potential, financial leverage, and other vital indicators. We have many different tools that can be utilized to determine how healthy Angel Oak is operating at the current time. Most of Angel Oak's value examination focuses on studying past and present price action to predict the probability of Angel Oak's future price movements. You can analyze the entity against its peers and the financial market as a whole to determine factors that move Angel Oak's price. Additionally, you may evaluate how the addition of Angel Oak to your portfolios can decrease your overall portfolio volatility.

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.
By borrowing funds, the firm incurs a debt that must be paid. But, this debt is paid in small installments over a relatively long period of time. This frees funds for more immediate use in the stock market. For example, suppose a company can afford a new factory but will be left with negligible free cash. In that case, it may be better to finance the factory and spend the cash on hand on inputs, labor, or even hold a significant portion as a reserve against unforeseen circumstances.

The Risk of Financial Leverage

The most obvious and apparent risk of leverage is that if price changes unexpectedly, the leveraged position can lead to severe losses. For example, imagine a hedge fund seeded by $50 worth of investor money. The hedge fund borrows another $50 and buys an asset worth $100, leading to a leverage ratio of 2:1. For the investor, this is neither good nor bad -- until the asset price changes. If the asset price goes up 10 percent, the investor earns $10 on $50 of capital, a net gain of 20 percent, and is very pleased with the increased gains from the leverage. However, if the asset price crashes unexpectedly, say by 30 percent, the investor loses $30 on $50 of capital, suffering a 60 percent loss. In other words, the effect of leverage is to increase the volatility of returns and increase the effects of a price change on the asset to the bottom line while increasing the chance for profit as well.