Financial companies may be the story of the year and this stock may be one that has been left behind. This is a car loan and credit card origination and maintenance company. As interest rates move higher around the nation this company will be able to earn more through its loan portfolio that it maintains.
Using predictive
technical analysis, we can analyze different prices and returns patterns and
diagnose historical swings to determine the real value of Atlanticus Holdings. In general, sophisticated investors focus on analyzing Atlanticus Holdings stock price patterns and their correlations with different microeconomic environment and drivers. They apply predictive analytics to build Atlanticus Holdings's daily price indicators and compare them against related drivers such as
momentum indicators and various other types of predictive indicators. Using this methodology combined with a more conventional
technical analysis and
fundamental analysis, we attempt to find the most accurate representation of Atlanticus Holdings's intrinsic value. In addition to deriving basic predictive indicators for Atlanticus Holdings, many experienced traders also check how macroeconomic factors affect Atlanticus Holdings price patterns. Please read more on our
technical analysis page or use our predictive modules below to complement your research.
Sophisticated investors, who have witnessed
many market ups and downs, anticipate that the market will even out over time. This tendency of Atlanticus Holdings' price to converge to an average value over time is called mean reversion. However, historically, high market prices usually discourage investors that believe in mean reversion to invest, while low prices are viewed as an opportunity to buy.
Please note, it is not enough to conduct a financial or market analysis of a single entity such as Atlanticus Holdings. Your research has to be compared to or analyzed against Atlanticus Holdings' peers to derive any actionable benefits. When done correctly, Atlanticus Holdings' competitive analysis will give you plenty of quantitative and qualitative data to validate your investment decisions or develop an entirely new strategy toward taking a position in Atlanticus Holdings.
How important is Atlanticus Holdings's Liquidity
Atlanticus Holdings
financial leverage refers to using borrowed capital as a funding source to finance Atlanticus Holdings ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. Atlanticus Holdings 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 Atlanticus Holdings' 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 Atlanticus Holdings' 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 Atlanticus Holdings's total debt and its cash.
Atlanticus Holdings Gross Profit
Atlanticus Holdings Gross Profit growth is one of the most critical measures in evaluating the company. The Gross Profit growth rate is calculated simply by comparing Atlanticus Holdings 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 Atlanticus Holdings Gross Profit growth over the last 10 years. Please check Atlanticus Holdings'
gross profit and other
fundamental indicators for more details.
An Additional Perspective On Atlanticus Holdings
Atlanticus Holdings is a financial services company that deals in both car loans and credit cards. They originate these loans and then provide servicing for customers.
I have been very bullish on the financial sector of the stock market. Our economy in the United States is growing and expanding. Because of this, the Fed is raising interest rates. With higher interest rates ATLC will be able to earn more from its loan portfolio. That translates into a larger bottom line without even having to grow its customer base. As interest rates increase, the loans that ATLC has on its book will get their interest rates increased.
At this time ATLC has been increasing its assets over the past few years. Here is a look at the asset totals that the company has in its portfolios along with its debt, respectively:
2012: $380,426 / $361,239
2013: $352,235 / $351,077
2014: $268,355 / $260,913
2015: $280,729 / $269,778
Both total assets and total debt saw a drop in 2014 from the year previous. The world economies were pulling back hard and the United States economy was far from immune to that. Since then the company has been improving its assets, or its loan portfolio. This upward trend was met with debts increasing simultaneously, however, at a slower pace. That is positive for the company. Given the current levels of its assets, increases in interest rates will translate into increases in revenue and earnings per share. Here are the two aforementioned, respectively:
2012: $156,016 / $1.27
2013: $138,630 / ($1.29)
2014: $167,416 / $0.51
2015: $128,103 / $0.12
During the year 2015 total revenue declined from the previous year. However, 2016 numbers are improved, although the financial world is awaiting the final numbers for the year. In the meantime, the EPS is expected to push towards $0.25 per share for the year. Right now, the stock is trading at $2.25 per share. That would put this stock in line with my minimum criteria of 10-times earnings. However, it is my belief that if the earnings came in at that level the stock would trade up quickly and stay there for a long time. The timing on this stock is immediate in consideration of its earnings release coming up shortly the middle of next month.
Regardless of where the earnings come in for the last quarter of last year, I am continually bullish on the industry. I mentioned that interest rates are heading higher. That means revenue for this company and it does not even need to lift a finger to get that new revenue. We have all seen adjustments to our credit cards with the interest that we pay. This company’s customers, along with other financial companies in the sector, are going to do the exact same across two board. The balances on customer’s credit cards are not likely to change. But, the makeup of the payments will. Their interest rate will increase and the amount that gets applied to the overall balance goes down. Again, more revenue to the company.
As the economy in the United States continues to expand at the rate that it has been expanding, the Federal Reserve is going to have to continue to increase interest rates. That increase will affect financial companies such as ATLC. They will pass that interest rate down to their credit card holders. And, the bottom line will continue to expand for this company.
You would do well to get into a company with expanding fundamentals such as these. And, with the company’s earnings report just around the corner, you would do well to get involved in this company soon.
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David Taylor is a Senior Member of Macroaxis Editorial Board - Sector Analysis. David is a professional writer who writes for multiple investment news outlets. His primary focus is dynamic movements in financial markets and effects of economic volatility on North American industries and sectors. David has many years of experience in financial service industry including working with major banks as a FX trader. In his free time, he does a lot of outdoors type activities including rock climbing, mountain biking, hiking, mountaineering and kayaking in the summer, and snowboarding in the winter.
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