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Our viewpoint on Capital Bancorp (USA Stocks:CBNK) and Village Bank (USA Stocks:VBFC)?

July 18, 2023  By Ellen Johnson
Macroaxis Story
By examining the fundamental indicators between Capital Bancorp and Village, we can assess the impact of market volatility on the prices of both companies. This analysis can also help determine if combining these companies in a single portfolio can help diversify away market risk. Pair trading strategies can also be utilized, such as matching a long position in Village with a short position in Capital Bancorp. For more information, please refer to our pair correlation module. Let's start by examining the assets. The asset utilization indicator measures the revenue generated for every dollar of assets a company currently holds. Capital Bancorp has an asset utilization ratio of 8.0 percent, indicating that the company generates $0.08 for each dollar of assets. An increasing asset utilization ratio suggests that Capital Bancorp is becoming more efficient in using each dollar of assets in its daily operations.

Further analysis

Capital Bancorp, a key player in the Banks-Regional industry, has been showing promising signs for investors. The company's net assets stand at a robust $2.12B, underpinned by a book value per share of 16.65X, which is significantly higher than its current valuation of $168.69M. This disparity suggests that the stock is undervalued, offering potential investors an opportunity to buy in at a lower price. Furthermore, the company's shares are largely held by institutions, with a total of 33.02% of shares owned by them, indicating a strong vote of confidence from professional investors. Despite a relatively low operating margin of 0.33%, Capital Bancorp has managed to generate a net income from continuing operations of $41.8M, demonstrating its ability to remain profitable. With a 52-week high of 27.1725 and a target price of 21.1, the stock presents a promising investment opportunity for those willing to take on the risk.
Published over a year ago
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Reviewed by Raphi Shpitalnik

Capital Bancorp, a key player in the Financial Services sector and a member of the Banks-Regional industry, is a stock that investors should consider for their portfolio. As of July 16, 2023, the company has a market capitalization of $256.1M and an enterprise value of $168.7M. Despite a quarterly revenue growth of -0.045, the company has managed to maintain a robust profit margin of 25.59% and an operating margin of 0.33%. The company's operating income stands at $64.3M, with gross profit reaching $163.3M. The total revenue generated by Capital Bancorp is a substantial $170M, with interest income contributing $150.6M to this figure. Capital Bancorp's financial health is further reflected in its retained earnings of $182.44M. However, investors should be aware of the company's debt to equity ratio, which stands at 6.60%. This figure indicates the company's reliance on debt to finance its growth. In terms of valuation, the company's price to earnings ratio is 10.65X, and its price to sales ratio is 2.01X. These figures suggest that the stock is reasonably priced relative to its earnings and sales. Investors should also note the company's short ratio of 2.95, with the number of shares shorted standing at 62.27K, down from 69.1K the previous month. This could indicate a growing confidence among investors in the company's prospects. Despite the promising figures, investors should also consider the company's probability of bankruptcy, which stands at 41.32%. This is a risk factor that needs to be factored into any investment decision. Finally, the company's yield is 0.0129%, which could provide a steady income stream for investors. The company's 50-day moving average is 17.5652, and it has a 52-week low of 15.2614. In conclusion, Capital Bancorp offers a promising investment opportunity, with solid financials and a reasonable valuation. However, like any investment, it comes with risks that need to be carefully considered. As many astute traders are steering clear of the banking sector, it seems prudent to delve deeper into Capital Bancorp and understand its position relative to Village Bank and other comparable entities. We aim to examine some of the competitive aspects of both Capital Bancorp and Village Bank.
Investment perspective, in general, refers to a viewpoint or opinion regarding investment opportunity in Capital Bancorp. It encompasses the assessment of an investment's potential risks and rewards, and expectations for its performance over time. Several factors influence the investment perspective on Capital Bancorp, including investment goals, risk tolerance, time horizon, market conditions, and research and analysis. Investors have varying goals, such as capital preservation, income generation, or long-term growth. Risk tolerance plays a significant role in shaping an investor's perspective, with some being more risk-averse and others willing to take on higher risks for potential returns.

How important is Capital Bancorp's Liquidity

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

How does Capital utilize its cash?

At this time, Capital Bancorp's Depreciation is quite stable compared to the past year. . To perform a cash flow analysis of Capital Bancorp, investors first need to understand how to read the cash flow statement. A cash flow statement shows the amount of cash Capital Bancorp is receiving and how much cash it distributes out in a given period. The Capital Bancorp cash flow statement breaks down these inflows and outflows into different buckets, including operating activities, investing activities, and financing activities.

Capital Bancorp Gross Profit

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

Breaking it down a bit more

Revenue is income that a firm generates from business activities such us rendering services or selling goods to customers. It is a crucial part of a business and an essential item when evaluating a company's financial statements. Revenues from a firm's primary business operations can be reported on the income statement as sales revenue, net sales, or simply sales, depending on the industry in which a given company operates.
Revenue is typically recorded when cash or cash equivalents are exchanged for services or goods and can include product or services discounts, promotions, as well as early payments on invoices or services rendered in advance.

Revenue Breakdown

Lets now take a look at Capital Bancorp revenue. Based on the latest financial disclosure, Capital Bancorp reported 169.98 M of revenue. This is 98.48% lower than that of the Banks sector and significantly higher than that of the Financials industry. The revenue for all United States stocks is 98.2% higher than that of Capital Bancorp. As for Village Bank we see revenue of 32.31 M, which is much higher than that of the Financials
Capital169.98 Million
Sector0.0
Village32.31 Million
170 M
Capital
Sector
Village
Capital Bancorp, a key player in the Banks-Regional industry, has been showing promising potential for investors.
With a market capitalization of $256.15M and a net asset of $2.12B, the company's stability is evident. Its operating income stands at $64.3M, with a net income of $41.8M, indicating a healthy profit margin of 0.26%. The company's book value is 16.652, and with a price to book ratio of 1.58X, it suggests that the stock is reasonably valued. The 52-week high of the stock is $27.1725, while the current day typical price is $19.01, indicating potential upside. The company's beta is 0.49, which is lower than 1, indicating that the stock is less volatile than the market. Capital Bancorp's risk-adjusted performance is 0.084, and its market risk-adjusted performance is 0.2741, both of which suggest that the company has been managing its risks effectively. The short percent of the stock is 0.0062, indicating a low level of short interest. In conclusion, Capital Bancorp's financial health and potential for growth make it a stock worth considering for investment. However, investors should also consider the company's probability of bankruptcy at 41.32% in their decision-making process. .

Will Capital Bancorp latest rise continue?

The latest Information Ratio for Capital Bancorp, a crucial performance indicator, has recently increased to 0.09. This suggests a minor enhancement in risk-adjusted returns. Despite this promising trend, there are signs that the stock price may experience a downward shift. Consequently, investors are advised to proceed with caution and keep a close watch on the performance of the stock. While the recent upward trend is positive, it remains uncertain whether this will persist amidst potential price volatility. Capital Bancorp demonstrates relatively low volatility, with skewness of 1.04 and kurtosis of 2.14. Nonetheless, we recommend all investors to conduct their own research on Capital Bancorp to ensure that all available information aligns with their expectations regarding its upside potential and anticipated future returns. Understanding different market volatility trends can often assist investors in timing the market accurately. Proper utilization of volatility indicators allows traders to gauge the risk of Capital Bancorp's stock against market volatility during both bullish and bearish trends.
The increased level of volatility associated with bear markets can directly affect Capital Bancorp's stock price, causing stress for investors as they witness a decline in the value of their shares. This often compels investors to rebalance their portfolios by purchasing different stocks as prices drop. In conclusion, Capital Bancorp presents a compelling investment opportunity. The company's current market value is 19, closely aligning with its valuation hype value of 18.98, suggesting that the market accurately reflects the company's potential. The analyst overall consensus is a 'Buy', with three strong buy recommendations and only two holds. The valuation real value stands at 20.9, indicating potential for growth. Furthermore, the possible upside price is 22.09, with the highest estimated target price by analysts being 22.5. Even considering the possible downside price of 17.89, the estimated target price value of 20.625 presents a promising outlook. Therefore, for investors who are uncommitted about Capital Bancorp, the data points towards a positive investment opportunity. .

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Editorial Staff

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
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 Ellen Johnson do not own shares of Capital Bancorp. Please refer to our Terms of Use for any information regarding our disclosure principles.

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