Cash is king in the world of finance, and Mainstreet Bank is no exception. With a healthy cash flow of $130.6M at the beginning of the period, the bank has demonstrated strong financial fundamentals. Despite a slight decrease in cash of $16.1M, the bank's retained earnings stand at a robust $106.5M. This, coupled with a low Price to Book ratio of 0.66X, suggests that Mainstreet Bank's stock is undervalued, presenting
potential investment opportunities. The bank's net income from continuing operations is also impressive at $29M, further strengthening its financial position. As we move into May, Mainstreet Bank's solid financial footing could illuminate new investment opportunities for discerning investors. Mainstreet Bank's market capitalization is projected to significantly increase based on recent years' reports. The current year's enterprise value is expected to grow to approximately $239M, while the price-to-sales ratio is forecasted to decline to 1.39. Mainstreet Bank is set to announce its earnings on April 15, 2024. Despite some Generation-Y investors' indifference towards the banking sector, it's worthwhile to examine Mainstreet Bank's fundamentals. We'll assess whether Mainstreet Bank shares are reasonably priced as we enter May. As Mainstreet Bank responds to market trends, it could be a potential investment option for your portfolio.
Typically, a company's
financial statements are the reports that show the
financial position of the company. There are three main documents that fall into the category of financial statements. These documents include Mainstreet Bank income statement, its balance sheet, and the statement of cash flows. Potential Mainstreet Bank investors and stakeholders use financial statements to determine how well the company is positioned to perform in the future. Although Mainstreet Bank investors may use each financial statement separately, they are all related. The changes in Mainstreet Bank's assets and liabilities, for example, are also reflected in the revenues and expenses that we see on Mainstreet Bank's income statement, which results in the company's gains or losses. Cash flows can provide more information regarding cash listed on a balance sheet, but not equivalent to net income shown on the income statement. Please read more on our
technical analysis and
fundamental analysis pages.
The goal of Mainstreet Bank
fundamental analysis is to do accurate financial forecasts. There are several possible objectives to fundamental analysis, such as projecting of Mainstreet Bank performance into the future periods or doing a reasonable stock valuation. The intrinsic value of Mainstreet Bank shares is the value that is considered the true value of the share. If
the intrinsic value of Mainstreet is higher than its market price, buying is generally recommended. If it is equal to the market price, it is recommended to hold; and if it is less than the market price, then one should sell all shares Mainstreet Bank. Please read more on our
fundamental analysis page.
And What about dividends?
A dividend is the distribution of a portion of Mainstreet Bank earnings, decided and managed by the company's board of directors and paid to a class of its shareholders. Note, announcements of dividend payouts are generally accompanied by a proportional increase or decrease in a company's stock price. Mainstreet Bank dividend payments follow a chronological order of events, and the associated dates are important to determine the shareholders who qualify for receiving the dividend payment. Mainstreet one year expected dividend income is about USD0.23 per share.
Investing in dividend-paying stocks, such as Mainstreet Bank is one of the few strategies that are good for long-term investment. Ex-dividend dates are significant because investors in Mainstreet Bank must own a stock before its ex-dividend date to receive its next dividend.
This type of analysis is very useful when you want to generate a past dividend schedule and payout information for Mainstreet Bank. Then that information in the form of graph and calendar can be used to fully explain how Du Pont dividends can provide a real clue to its valuation.
How important is Mainstreet Bank's Liquidity
Mainstreet Bank
financial leverage refers to using borrowed capital as a funding source to finance Mainstreet Bank ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. Mainstreet Bank 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 Mainstreet Bank'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 Mainstreet Bank'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 Mainstreet Bank's total debt and its cash.
Another Deeper Perspective
Although in the United States, the Securities and Exchange Commission has enforced strong rules to prevent insiders from engaging in insider trading, finding insiders among active shareholders of Mainstreet Bank is not uncomon. Many companies such as Mainstreet Bank have both institutions investors and insiders sharing the ownership. Retail investors typically buy and sell stocks in round lots of 100 shares or more. Other other hand institutional investors are known to buy and sell in block trades of 10,000 shares or more. Let's take a look at how the ownership of Mainstreet is distributed among investors.
Ownership Allocation
The
market capitalization of Mainstreet Bank is $128.07 Million. Over half of Mainstreet Bank's outstanding shares are owned by
institutional investors. These institutional investors are typically referred to as corporate investors that shop for positions in a given instrument to benefit from reduced trade commissions. Consequently, these
institutions are subject to different rules and regulations than regular investors in Mainstreet Bank. Please watch out for any change in the
institutional holdings of Mainstreet Bank as this could mean something significant has changed or is about to change at the company. Note, that even with substantial
debt, if the true value of the firm is larger than the current market value, you may still be able to generate positive returns on investment in this company at some point.
| Retail Investors34.85% | Insiders9.25% | Institutions55.9% |
| Retail Investors | 34.85 |
| Insiders | 9.25 |
| Institutions | 55.9 |
Please be aware that individual investors typically purchase shares for their personal accounts and usually in smaller quantities compared to institutional investors. While they might influence Mainstreet Bank's decisions if they own a significant combined portion of its shares, such influence is relatively rare. Conversely, institutional investors - like mutual funds, pension funds, hedge funds, and other investment companies - often have a substantial sway over Mainstreet Bank's decisions due to their larger holdings.
| 2021 | 2022 | 2023 | 2024 (projected) |
Total Stockholder Equity | 188.8M | 198.3M | 221.5M | 232.6M | Total Assets | 1.6B | 1.9B | 2.0B | 2.1B |
Asset Utilization
The asset utilization indicator refers to the revenue earned for every dollar of assets a company currently reports. Mainstreet Bank has an asset utilization ratio of 6.28 percent. This suggests that the Company is making $0.0628 for each dollar of assets. An increasing asset utilization means that Mainstreet Bank is more efficient with each dollar of assets it utilizes for everyday operations.
| Non Current Assets Total2 B | | | | | | | |
| Non Current Assets Total | 2 Billion | 70.83 |
| Non Currrent Assets Other | 50.87 Million | 1.8 |
| Other Assets | 120.87 Million | 4.27 |
| Total Current Assets | 185.08 Million | 6.54 |
| Earning Assets | 112.94 Million | 3.99 |
| Net Tangible Assets | 112.04 Million | 3.96 |
| Other Current Assets | 233.91 Million | 8.27 |
| Intangible Assets | 9.64 Million | 0.34 |
"Cash is king" is a saying that rings true when looking at Mainstreet Bank's financial fundamentals. Despite a reported EBIT loss of $3.9M, the bank's end period cash flow stands at a robust $114.5M, demonstrating strong liquidity. Furthermore, Mainstreet Bank has a low beta of 0.45, suggesting it's less volatile than the market, which could be appealing to risk-averse investors. However, investors should be cautious as the bank has a high probability of bankruptcy at 44.80%. Despite this, with a PE ratio of just 5.1754 and an EPS estimate for next year at 2.17, the bank could present an undervalued investment opportunity in May.
Will Mainstreet slip impact its fundamentals?
The recent drop in Mainstreet Bank's stock kurtosis to 1.59 suggests a decrease in extreme price movements, indicating less volatility. This could potentially stabilize the bank's trading pattern, but it may also limit the potential for outlier returns. Investors should be aware that while a lower kurtosis could stabilize performance, it might also dampen return prospects. Mainstreet Bank's stock exhibits low volatility, with a skewness of -1.0 and kurtosis of 1.59. Understanding
market volatility trends can help investors time the market. Using volatility indicators properly allows traders to measure Mainstreet Bank's stock risk against market volatility during both bullish and bearish trends. The increased volatility in bear markets can impact
Mainstreet Bank's stock price and stress investors as they see their shares' value drop, often prompting portfolio rebalancing.
Our Conclusion on Mainstreet Bank
Whereas other companies in the banks—regional industry are either recovering or due for a correction, Mainstreet may not be as strong as the others in terms of longer-term growth potentials. The inconsistency in the assessment between current Mainstreet valuation and our trade advice on Mainstreet Bank 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 Mainstreet Bank.
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Gabriel Shpitalnik is a Member of Macroaxis Editorial Board. Gabriel is a young entrepreneur and writes predominantly on the business, technology, and finance sector. He likes to analyze different equity instruments across a wide range of industries focusing primarily on consumer products and evolving technologies.
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 Gabriel Shpitalnik do not own shares of Mainstreet Bank. Please refer to our
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