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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Cathay General Bancorp (XNAS:CATY) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
CATY
Name:
CATHAY GENERAL BANCORP (XNAS:CATY)
Sector:
85.18M
Industry:
Banks�Regional
CEO:
Mr. Pin Tai
Total Employees:
1,156
Our Technological Advancement Rating
Our Rating:
D
Technological advancement compared to industry is -2692.26% lower
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF CATHAY GENERAL BANCORP(CATY) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND BANKS�REGIONAL INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
41.3
One Month Price Target:
$41.56
Six Month Price Target :
$42.87
Likely Price in One Year's Time:
Ticker:
$44.45
Likely Trading Range Today Under (Normal Volatility)
$41.12
Price Upper limit ($) :
$41.53
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$38.87
This week:
$35.87
This month :
$30.44
Other Primary facts
Market Cap:
3.03B
Market Cap Classification:
Mid Cap
Number of Shares
IPO Date:
74.47M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
15.18%
-15.46%
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$52.57
$47.39
$30.03
$35.21
Medium risk (<10%) entry points
Buy Call
Sell Call
$45.71
Buy Put:
Sell Put:
$44.60
$36.88
$38.00
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
CATY
Sharpe Ratio:
1.66%
Comparison:
CATY, is amongst the top 60% stocks with highest risk-adjusted returns
Sharpe ratio is 35.04% higher than the industry
& is -27.22% lower than the market/S&P 500 average
Average Returns/Yield of
CATY
Daily returns:
0.06%
Weekly returns:
0.28%
Monthly returns:
1.14%
Yearly returns:
10.91%
Comparison of returns:
Average annual returns/yield (last 3 years) is 24.93% above industry average
Classification:
CATY, is amongst the top 40% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.57
Statistical test of Returns:
CATY has yielded returns statistically similar to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
2.89%
Weekly Volatility:
6.46%
Monthly Volatility:
12.93%
Yearly Volatility:
44.78%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
0.04%
Volatility in last five trading days has been -98.69% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-5.88%
Weekly VaR:
-13.15%
Monthly VaR:
-26.29%
How Much Can the price of
CATY
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-23%
Worst case (decline):
-91.08%
This translates to price declining to:
$31.97
This translates to price declining to:
$3.68
Severe Crash Probability
Risk of crash in next 6/12 months: Medium (<50%)
What is Value at Risk (VaR)?
Risk Fundamentals
CATY is a 85.58% riskier investment compared to the market/S&P 500 & is 58.98% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is 1.18% above industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
CATY
Beta in relation to market/S&P 500--1.13
Expected beta in 1 year's time:
0.749
Expected beta in 3 year's time:
1.059
Unlevered (debt free) Beta:
1.106
Beta in relation to Nasdaq (XNAS):
0.635
Beta in relation to all global stocks::
1.059
Beta Comparison & Analysis
Beta of competitors/peers::
1.025
Beta is 10.67% higher than peers
Average Industry Beta:
0.964
Beta is 17.69% above industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
8.19%
Sustainable growth rate is -10.33% below industry average
Alpha provided | Alpha Analysis
Alpha provided:
0.027
Alpha is 133.85% above industry average alpha yield
Alpha is 173% higher than market/& is unsustainably high
Analysis of Cost of Capital of
CATY
Equity cost of capital:
0.109
Equity cost of capital is 11.97% above industry mean WACC
Unlevered (without debt) cost of capital:
10.65%
Before-tax cost of debt:
76.43%
After-tax cost of debt:
60.38%
Overall debt rating:
Non-investment grade (junk/speculative grade
Weighted average cost of capital (WACC):
60.38%
WACC is -3.34% below industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$9.13
Revenue growth rate per share of (3Y):
1.27
Annual revenue growth rate is -46.80% below industry average
EPS:
$3.87
Expected Annual growth rate of EPS (3Y):
2.88%
Expected future EPS growth rate is -76.07% lower than the Banks�Regional industry
Free cash flow (FCF) per share:
$4.24
Balance sheet equity growth per share: 26.15%
Equity growth rate per share is -32.47% lower than the industry
Debt per share
$1.05
EBITDA per share
$6.21
Valuation Analysis Today of
CATY
P/E Ratio:
10.13
P/E Ratio of Competitors/Peers:
15.38
P/E ratio is -34.16% lower than main peers & is -18.40% lower than the industry
Stock price/value with industry average P/E ratio: $48.02
CATY is -14.00% undervalued if valued using industry average P/E ratio
Share value as per dividend discount (DDM) model: $26.31
Present value of the expected future dividends only: $13.50
P/S (Price to Sales ratio):
4.52
Price to sales ratio is 5.76% above the industry mean
P/B (Price to book value ratio):
1.27
Price to free cash flow: 9.75
-
Net income growth rate (3Y):
16.26%
Net income growth rate is -70.48% lower than the industry average net income growth rate
Dividend Analysis
Dividend payout rate: 8.51%
Dividend yeild: 3.22%
Previous Dividend: $0.34
Previous adjusted dividend: $0.34
Previous Dividend: $1.33
Expected next dividend best case: $0.35
Expected next dividend worst case: $0.33
Average dividend payment (long-term): $0.32
Average dividend increase/decrease (growth rate) % per period: 0.97%
Expected next dividend payment date: 09/05/2022
Expected next dividend record date: 25/08/2022
Expected next dividend declaration date: 15/08/2022
Previous dividend payment date: 06/06/2022
Previous dividend record date: 27/05/2022
Previous dividend declaration date: 16/05/2022
Dividend History:
2022-05-26--$0.34
2021-11-26--$0.34
2021-05-27--$0.31
2022-02-24--$0.34
2021-08-27--$0.31
2021-02-26--$0.31
Dividend growth rate is -95.88% lower than the industry average
In-depth Debt & Leverage Analysis
Debt to equity ratio:
3.24%
Net debt to equity ratio:
-48.70%
Debt to assets ratio:
0.38%
Net debt to assets ratio:
-5.65%
Debt-to-asset ratio is -99.77% below industry average
Ability to repay debt:
Interest coverage ratio:
7.7
Interest coverage ratio is 829.64% more than industry average
Looking forward:
Debt growth rate:
-40.87%
Annual debt growth is -13004% lower than industry average debt growth rate
Debt repayment rate in last quarter: 0.00%
Analysis of Key Statistics
Correlation of price movement with the market:
0.542
Statistical significance of correlation:
CATY has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.501
Stock price is 8.24% more correlated with the market, compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.501
Correlation of price movement with Nasdaq (^IXIC):
0.023
Covariance of price movement with the market:
0.039
Kurtosis
5.633
Returns have moderate fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are more probable, compared to assets with normally distributed returns
Skewness of returns:
0.124
Returns are, approximately, symmetrical
Fundamental Analysis & Dupont Analysis of
CATY
Gross Profit Margin Ratio:
-
Operating Profit Margin Ratio:
0.00%
-
Net Profit Margin Ratio:
-
Effective Tax Rate:
22.28%
Effective tax rate is 3.42% higher than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
12.38%
Return on equity (ROE) is 3.80% higher than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
1.44%
Return on assets (ROA) is -37.63% lower than the industry
Financial Leverage:
1.0x
Current Ratio:
0
-
Cash Conversion Cycle (days):
0
-
The remaining useful life of property plant & equipment is: 0.3 years
Stock based compensation to net income ratio:
0.54%
In-depth Efficiency Analysis
Revenue generated per employee:
588.2K
Each employee generates 55% more revenue than industry average revenue per employee
EBITDA generated per employee:
400.0K
Each employee generates 77% more EBITDA than industry average revenue per employee
Profit generated per employee:
259.5K
Each employee generates 83% more net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
73.7K
Each employee generates -11% less free cash flow than industry average revenue per employee
Assets/Capital per employee
1.8M
Each employee generates -11% less free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
-
-
Competitors/Peer firms of
CATY
FIRSTCASH HOLDINGS, INC. (XNAS:FCFS)
NAVIENT CORPORATION (XNAS:NAVI)
VALLEY NATIONAL BANCORP (XNAS:VLYPP)
ENACT HOLDINGS, INC. (XNAS:ACT)
HAMILTON LANE INCORPORATED (XNAS:HLNE)
SIMMONS FIRST NATIONAL CORPORATION (XNAS:SFNC)
FOCUS FINANCIAL PARTNERS INC. (XNAS:FOCS)
AGCUU
BULL HORN HOLDINGS UNT (XNAS:BHSEU)
Current Analyst Ratings
Strong buy�0%
Buy�13%
Hold�21%
Sell�0%
Strong sell�0%
Overall analyst sentiment is: Hold
Income Statement
Period:
TTM
Date:
3/31/22
Revenue:
679.96M
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
-
-
-
155.42M
160.40M
4.98M
-
-
675.14M
60.01M
16.41M
462.37M
-
299.95M
385.95M
86.01M
299.95M
Statement of Cash Flow
Date:
Period:
4.56M
Differed Income Tax :
3.12M
Stock Based Compensation :
1.61M
Change in Working Capital :
- 10327.00K
Accounts Receivables:
- 13309.00K
Other Working Capital:
- 1744.00K
Other Non-Cash Items:
12.47M
Net Cash Provided by Operating Activities:
86.46M
Investments in PP&E:
- 1276.00K
Net Acquisitions:
- 73882.00K
Purchases of Investments:
- 204882.00K
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
3/31/22
2022
Q1
1.26B
1.22B
2.48B
60.06M
-
-
-
130.84M
375.71M
7.51M
1.54B
-
-
2.05B
22.92B
20.87B
-
-
-
-
-
-
78.51M
-
78.51M
18.52B
18.44B
909.00K
2.03B
- 45977.0K
432.62M
March 31, 2022 at 6:00:00 AM
-
2.42B
20.87B
2.76B
78.51M
- 1179573.0K
45.95M
- 412512.00K
- 646606.00K
-
945.00K
- 32896.00K
- 25515.00K
- 574005.00K
- 631471.00K
-
- 1191620.00K
1.26B
2.45B
86.46M
- 1276.00K
85.18M
Our Proprietary Portfolio Rating
Our Rating:
D
Price Forecast/Expected Price in Next 5 Years of
CATY
2023
2024
2025
2026
2027
$53.17
$57.22
$61.58
$66.27
$71.32