Are you still shorting First?
 | By Gabriel Shpitalnik | Macroaxis Story |
First Hawaiian (FHB), a key player in the Banks-Regional industry, is showing promising signs of reduced volatility, making it a potential investment opportunity this August. The Coefficient of Variation, a measure of risk-adjusted performance, stands at 1.3K, indicating a decrease in volatility. This is further supported by the Jensen Alpha, a measure of the expected return of the stock given its level of risk, which is currently at 0.0806. This suggests that the stock is expected to perform well relative to its risk level. The Sortino Ratio, which measures the potential for high returns relative to downside risk, is at 0.0619, indicating that the stock has a good risk/reward profile. Furthermore, the stock's Semi Deviation, a measure of downside risk, is at 2.22, which is relatively low and suggests a lower likelihood of significant negative price movements. In terms of price, First Hawaiian's last price was $21.79, close to its day median price of $21.45. The stock's high price was $22, indicating a potential upside of 5.68%. However, investors should be aware of the expected shortfall of 2.75, which indicates a potential loss if the worst-case scenario occurs. Overall, the anticipated further decline in volatility for First Hawaiian, combined with its promising risk/reward profile and potential upside, make it a potentially attractive investment opportunity in August. However, as always, investors should carefully consider their own risk tolerance and investment objectives before making a decision.
In-depth evaluation
This firm carries a debt of 75 million, with a debt to equity (D/E) ratio of 6.07. This indicates that First Hawaiian may struggle to generate sufficient cash to meet all of its financial obligations. While debt can serve as a useful tool for First Hawaiian, difficulties may arise if the company struggles to pay it off, either through new capital or free cash flow. In such a scenario, First Hawaiian's shareholders could potentially lose their entire investment if the company fails to meet its legal debt repayment obligations. However, a more common scenario is for companies like First Hawaiian to issue additional shares at discounted prices, which can dilute the value of existing shares. Despite this, debt can be an excellent tool for First Hawaiian to invest in high-return growth opportunities. When considering First Hawaiian's use of debt, it is important to evaluate it in conjunction with the company's cash and equity positions.Macroaxis uses a strict editorial review process to publish stories and blog posts. Our publishers support our company and may receive a small commission when the partner links or references are utilized. Commissions do not affect the opinions or evaluations of our editorial team. The information our editors and media partners deliver is confidential and licensed for your sole use as a Macroaxis user. We reserve all rights to the content of this article, and therefore copying or distributing this story in whole or in part is strictly prohibited.
Reviewed by Ellen Johnson
First Hawaiian (FHB), a prominent player in the Financial Services sector, specifically Banks, has been experiencing a decline in volatility, presenting a potentially promising investment opportunity this August. The company, traded on NASDAQ, has shown a steady Rate Of Daily Change of 1, with a Day Typical Price of $21.56, slightly above its Valuation Real Value of $21.14. Despite the Analyst Overall Consensus being 'Sell', with 1 Strong Sell and 1 Sell, the company has a Posible Upside Price of $25.63, significantly higher than the Analyst Lowest Estimated Target Price of $18. The Accumulation Distribution stands at 4.7K, indicating a balanced market condition. The company's fiscal year ends in December, and with a current Valuation Market Value of $21.79, it is slightly undervalued compared to its Valuation Hype Value of $22.12. The Analyst Target Price Estimated Value is $21.833, with the Analyst Highest Estimated Target Price being $26. The Naive Expected Forecast Value is $22.86, suggesting potential for growth. However, investors should be aware of the possible downside price of $20.08. First Hawaiian is generating 0.3665% in daily returns, assuming a volatility of 2.7724% based on return distribution over a 60-day investment horizon. As many investors are showing increased interest in the banking sector, it's appropriate to examine First Hawaiian. We will assess the risk associated with taking a position in First Hawaiian at this time.Volatility is a rate at which the price of First Hawaiian 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 First Hawaiian may increase or decrease. In other words, similar to First's beta indicator, it measures the risk of First Hawaiian and helps estimate the fluctuations that may happen in a short period of time. So if prices of First Hawaiian 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 First Hawaiian's Liquidity
First Hawaiian financial leverage refers to using borrowed capital as a funding source to finance First Hawaiian ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. First Hawaiian 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 First Hawaiian'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 First Hawaiian'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 First Hawaiian's total debt and its cash.
First Hawaiian Gross Profit
First Hawaiian Gross Profit growth is one of the most critical measures in evaluating the company. The Gross Profit growth rate is calculated simply by comparing First Hawaiian 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 First Hawaiian Gross Profit growth over the last 10 years. Please check First Hawaiian's gross profit and other fundamental indicators for more details.
First Hawaiian Volatility Drivers
First Hawaiian unsystematic risk is unique to First Hawaiian 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 First Hawaiian you can also buy Bank of Hawaii. 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 First Hawaiian 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 First Hawaiian income statement and balance sheet. Here are more details about First volatility.Click cells to compare fundamentals
What is the case for First Hawaiian Investors
The current rise in First Hawaiian short term price appreciation could raise concerns from investors as the firm is trading at a share price of 21.79 on 93,556 in volume. The company directors and management have successfully maneuvered the firm at convenient times to take advantage of all market conditions in June. The stock standard deviation of daily returns for 90 days investing horizon is currently 2.77. The current volatility is consistent with the ongoing market swings in June 2023 as well as with First Hawaiian unsystematic, company-specific events. First Hawaiian (FHB), a prominent player in the Banks-Regional industry, has seen a significant decline in volatility, presenting a potentially promising investment opportunity this August. The company's downside variance stands at 5.92, with a standard deviation of 2.82 and a semi deviation of 2.22, all of which point to reduced risk. With a total debt of only $75M against a net asset value of $24.58B, the company's financial health appears robust. The company's operating margin is at 0.46%, with a gross profit of $791.68M and net income of $265.69M.The cash flow from operations is a healthy $430.61M, supporting the company's operations and potential for growth. The stock’s price to earnings ratio stands at 16.64X, and its book value per share is 18.26X, both of which suggest a fair valuation. Shares owned by institutions make up a staggering 99.45% of First Hawaiian's holdings, indicating strong confidence among seasoned investors. Furthermore, the company's beta of 1.03 suggests it generally follows market trends. The Treynor Ratio, a measure of risk-adjusted returns, stands at 0.0892, providing further evidence of the stock's potential. With a market capitalization of $2.81B, First Hawaiian is a significant player in its industry. Given the company's strong financials and reduced volatility, investors may find it an attractive opportunity in the current market climate. .
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