Toyota Motor gains 1.03 percent regardless of modest market pull down
 | By Ellen Johnson | Macroaxis Story |
Today's write-up is for all investors who are seriously contemplating on taking a position in Toyota Motor. I will summarize the rationale of why Toyota Motor stakeholders were not insulted from the new market pull down. Toyota Motor chance of financial distress is under 39.00 . Allowing for the 30-days total investment horizon, Toyota Motor is expected to generate 1.53 times less return on investment than the market. But when comparing it to its historical volatility, the company is 1.66 times less risky than the market. It trades about 0.14 of its potential returns per unit of risk. The market is currently generating roughly 0.13 of returns per unit of risk over similar time horizon. What is Toyota Motor Target Price Odds to finish over Current Price? Out from normal probability distribution, the odds of Toyota Motor to move above current price in 30 days from now is about 14.91%. The Toyota Motor Corporation probability density function shows the probability of Toyota Motor Stock to fall within a particular range of prices over 30 days . Allowing for the 30-days total investment horizon, Toyota Motor has beta of 0.0922 . This entails as returns on market go up, Toyota Motor average returns are expected to increase less than the benchmark. However during bear market, the loss on holding Toyota Motor Corporation will be expected to be much smaller as well. Additionally, the company has an alpha of 0.0935 implying that it can potentially generate 0.0935% excess return over Russell 2000 after adjusting for the inherited market risk (beta).
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 Michael Smolkin
The company is active under Consumer Cyclical sector as part of Auto Manufacturers industry. This firm dividends can provide a clue to current valuation of the stock. Toyota Motor one year expected dividend income is about $2.05 per share. Lets now take a look at Toyota Motor Price to Earning. Based on latest financial disclosure the price to earning indicator of Toyota Motor Corporation is roughly 8.68 times. This is 65.14% lower than that of the Consumer Cyclical sector, and 11.97% lower than that of Auto Manufacturers industry, The Price to Earning for all stocks is 69.78% higher than the company.
Please note, it is not enough to conduct a financial or market analysis of a single entity such as Toyota. Your research has to be compared to or analyzed against Toyota's peers to derive any actionable benefits. When done correctly, Toyota's 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 Toyota Motor.
Investing in Toyota, just like investing in any other equity instrument, is characterized by a strong risk-return correlation. High risks mean high returns and low risk means lower expected returns. Risk management is the act of identifying and assessing the potential risk and developing strategies to minimize these risks and earn maximum possible profits while holding Toyota along with other instruments in the same portfolio. Using conventional technical analysis and fundamental analysis to select individual securities into a portfolio complements risk management and adds value to overall investors' investing strategies.
Sophisticated investors, who have witnessed many market ups and downs, anticipate that the market will even out over time. This tendency of Toyota's 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.
How important is Toyota's Liquidity
Toyota financial leverage refers to using borrowed capital as a funding source to finance Toyota Motor ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. Toyota 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 Toyota'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 Toyota'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 Toyota's total debt and its cash.
Toyota Gross Profit
Toyota Gross Profit growth is one of the most critical measures in evaluating the company. The Gross Profit growth rate is calculated simply by comparing Toyota 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 Toyota Gross Profit growth over the last 10 years. Please check Toyota's gross profit and other fundamental indicators for more details.
Toyota Correlation with Peers
Investors in Toyota can reduce exposure to individual asset risk by holding a diversified portfolio of assets in addition to a long position in Toyota Motor. Diversification will allow for the same portfolio return with reduced risk. The correlation table of Toyota and its peers is a two-dimensional matrix that shows the correlation coefficient between pairs of securities Toyota is related in some way. The cells in the table are color-coded to highlight significantly positive and negative relationships. Each cell shows the correlation between one pair of equities and can be used to run pair trading strategies or create efficient portfolios with your current brokerage. Please check volatility of Toyota for more details
Breaking it down
The modest gains experienced by current holders of Toyota Motor has created some momentum for investors as it was traded today as low as 141.01 and as high as 141.86 per share. The company directors and management have been quite successful with maneuvering the stock at opportune times to take advantage of all market conditions in October. The stock standard deviation of daily returns for 30 days (very short) investing horizon is currently 0.7485. The very small Stock volatility is a good signal to investors with longer term investment horizons. Toyota Motor preserves 123.50 of book value per share. Toyota Motor is selling for under 141.66. That is 1.03 percent increase. Opened at 141.66. In closing, our final buy/sell advice on the business is Strong Hold. We believe Toyota Motor is overvalued with below average chance of distress for the next two years.
Building efficient market-beating portfolios requires time, education, and a lot of computing power!
The Portfolio Architect is an AI-driven system that provides multiple benefits to our users by leveraging cutting-edge machine learning algorithms, statistical analysis, and predictive modeling to automate the process of asset selection and portfolio construction, saving time and reducing human error for individual and institutional investors.
Try AI Portfolio ArchitectEditorial Staff
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 Toyota Motor. Please refer to our Terms of Use for any information regarding our disclosure principles.