<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "If you are interested in The Greenbrier Companies, Inc. (NYSE: GBX), you may want to review its beta (measure of stock price volatility) to understand the impact the stock might have on your portfolio. Volatility is considered a measure of risk in modern financial theory. Investors may think that volatility is divided into two main categories. The first type is company-specific volatility. Investors use uncorrelated equity diversification to reduce this type of price volatility across the entire portfolio. The other type, which can not be diversified, is the volatility of the entire market. Each market share is exposed to this volatility, linked to the fact that stock prices are correlated in an efficient market. "Data-reactid =" 28 "> If you're interested in The Greenbrier Companies, Inc. (NYSE: GBX), you may want to look at its beta (measure of stock price volatility) to understand the impact volatility is considered a measure of risk in the theory of modern finance volatility falls into two main categories: the first, the volatility specific to a company, the diversification of non-equity correlated to reduce this type of portfolio price volatility, the other type, which can not be diversified, is the volatility of the overall market.Each stock is exposed to this volatility, due to the fact that equities are correlated in an efficient market.
Some stocks closely mimic market volatility, while others have moderate, exaggerated or uncorrelated price movements. Beta can be a useful tool for understanding how an equity is influenced by market risk (volatility). However, Warren Buffett said that "volatility is far from being risky" in his 2014 letter to investors. Thus, although useful, the beta is not the only measure to take into account. To use the beta version as an investor, you must first understand that the market is endowed with a beta version. A stock whose beta is less than one is less volatile than the market, is more volatile but not correlated to the market in general. In comparison, a stock with a beta greater than 1 tends to move in the same direction as the market in the long run, but with larger price changes.
<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = " Discover our latest analyzes for Greenbrier companies "data-reactid =" 30 "> Discover our latest analysis on Greenbrier companies
What does the GBX beta value mean to investors?
Given that its beta is 1.92, we can assume that the Greenbrier Companies stock price has been quite sensitive to market volatility (over the past 5 years). Based on the past, we can expect Greenbrier Companies' stock to grow faster than markets in times of optimism, but to fall more quickly in times of pessimism. The beta is worth considering, but it is also important to determine if Greenbrier Companies is increasing its revenues and revenues. You can take a look for yourself, below.
NYSE: GBX Profit and Loss Account Exported February 11, 19
Does the size of GBX influence the expected beta?
Greenbrier Companies is a small company, but not tiny and little known. It has a market capitalization of 1.3 billion US dollars, which means that it would be in the sights of institutional investors. It is not particularly surprising that its beta is higher than that of the overall market. This is because it takes less money to influence the price of a small company's shares than a large company.
What does this mean for you?
Beta only tells us that the price of Greenbrier Companies shares is sensitive to broader market movements. This could indicate that it is a business with high growth or strongly influenced by sentiment because it is speculative. Alternatively, it could have an operational leverage in its business model. In the end, beta is an interesting metric, but there is still a lot to learn. The purpose of this article is to inform investors about beta values, but important corporate fundamentals such as the financial health and performance of Greenbrier Companies should also be considered. I strongly recommend that you dive deeper by considering the following points:
- Future prospects: What do well-informed industry analysts predict for GBX's future growth? Check out our free research report on analyst consensus on GBX's outlook.
- antecedents: Has GBX always been successful regardless of the ups and downs of the market? Go into more detail in past performance reviews and review the free visual representations of GBX history for clarity.
- Other interesting actionsIt is useful to check how GBX compares with other companies in terms of valuation. You can start with this free list of potential options.
<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "To help readers understand the past volatility of the financial market in the short term, our goal is to provide you with a long-term research analysis based solely on fundamental data. Note that our analysis does not take into account the latest price sensitive business announcements.
The author is an independent contributor and, at the time of publication, was not positioned in the actions mentioned. For errors that need to be corrected, please contact the publisher at the address firstname.lastname@example.org.
"data-reactid =" 53 "> To help readers understand the short-term volatility of the financial market, we aim to provide you with a long-term research analysis based solely on fundamental data. account of the latest price sensitive business announcements.
The author is an independent contributor and, at the time of publication, was not positioned in the actions mentioned. For errors that need to be corrected, please contact the publisher at email@example.com.