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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Merchants Bancorp (XNAS:MBIN) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
MBIN
Name:
MERCHANTS BANCORP (XNAS:MBIN)
Sector:
1.30B
Industry:
Banks�Regional
CEO:
Mr. Michael Petrie
Total Employees:
481
Our Technological Advancement Rating
Our Rating:
D
Technological advancement compared to industry is -826.83% lower
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF MERCHANTS BANCORP(MBIN) 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 ($) :
26.5
One Month Price Target:
$26.66
Six Month Price Target :
$27.48
Likely Price in One Year's Time:
Ticker:
$28.46
Likely Trading Range Today Under (Normal Volatility)
$26.41
Price Upper limit ($) :
$26.68
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$24.91
This week:
$22.95
This month :
$19.41
Other Primary facts
Market Cap:
1.13B
Market Cap Classification:
Small Cap
Number of Shares
IPO Date:
43.11M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
21.13%
-24.88%
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:
$33.85
$30.41
$19.15
$22.59
Medium risk (<10%) entry points
Buy Call
Sell Call
$29.30
Buy Put:
Sell Put:
$28.56
$23.69
$24.44
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
MBIN
Sharpe Ratio:
4.96%
Comparison:
MBIN, is amongst the top 20% stocks with highest risk-adjusted returns
Sharpe ratio is 303.95% higher than the industry
& ratio is 117.71% higher than the market/S&P 500 average
Average Returns/Yield of
MBIN
Daily returns:
0.16%
Weekly returns:
0.79%
Monthly returns:
3.14%
Yearly returns:
10.91%
Comparison of returns:
Average annual returns/yield (last 3 years) is 245.88% above industry average
Classification:
MBIN, is amongst the top 20% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.77
Statistical test of Returns:
MBIN has not yielded statistically significant higher returns when compared to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
2.99%
Weekly Volatility:
6.69%
Monthly Volatility:
13.37%
Yearly Volatility:
46.33%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
0.36%
Volatility in last five trading days has been -87.82% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-5.98%
Weekly VaR:
-13.38%
Monthly VaR:
-26.76%
How Much Can the price of
MBIN
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-22%
Worst case (decline):
-92.71%
This translates to price declining to:
$20.71
This translates to price declining to:
$1.93
Severe Crash Probability
Risk of crash in next 6/12 months: Very high (>70%)
What is Value at Risk (VaR)?
Risk Fundamentals
MBIN is a 88.89% riskier investment compared to the market/S&P 500 & is 61.82% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is 4.69% above industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
MBIN
Beta in relation to market/S&P 500--1.10
Expected beta in 1 year's time:
0.753
Expected beta in 3 year's time:
1.065
Unlevered (debt free) Beta:
0.136
Beta in relation to Nasdaq (XNAS):
0.562
Beta in relation to all global stocks::
0.894
Beta Comparison & Analysis
Beta of competitors/peers::
0.744
Beta is 47.68% higher than peers
Average Industry Beta:
0.964
Beta is 13.96% above industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
20.00%
Sustainable growth rate is 119.04% above industry average
Alpha provided | Alpha Analysis
Alpha provided:
0.271
Alpha is 2232.93% above industry average alpha yield
Alpha is 1723% higher than market/& is unsustainably high
Analysis of Cost of Capital of
MBIN
Equity cost of capital:
0.107
Equity cost of capital is 9.45% above industry mean WACC
Unlevered (without debt) cost of capital:
1.33%
Before-tax cost of debt:
-
After-tax cost of debt:
-
Overall debt rating:
-
Weighted average cost of capital (WACC):
-
-
Key Per-Share Metrics & Analysis
Revenue per share:
$9.05
Revenue growth rate per share of (3Y):
0.96
Annual revenue growth rate is 629.93% above the industry average
EPS:
$5.01
Expected Annual growth rate of EPS (3Y):
44.43%
Expected future EPS growth rate is 269.54% higher than the Banks�Regional industry
Free cash flow (FCF) per share:
$21.61
Balance sheet equity growth per share: 204.75%
Equity growth rate per share is 428.76% higher than the industry
Debt per share
$0.00
EBITDA per share
$7.56
Valuation Analysis Today of
MBIN
P/E Ratio:
5.9
P/E Ratio of Competitors/Peers:
13.32
P/E ratio is -55.71% lower than main peers & is -52.46% lower than the industry
Stock price/value with industry average P/E ratio: $62.17
MBIN is -57.37% undervalued if valued using industry average P/E ratio
Share value as per dividend discount (DDM) model: $22.55
Present value of the expected future dividends only: $3.15
P/S (Price to Sales ratio):
2.93
Price to sales ratio is -31.56% below the industry mean
P/B (Price to book value ratio):
0.96
Price to free cash flow: 1.23
-
Net income growth rate (3Y):
260.03%
Net income growth rate is 372.16% higher than the average industry net income growth rate
Dividend Analysis
Dividend payout rate: 3.79%
Dividend yeild: 1.21%
Previous Dividend: $0.07
Previous adjusted dividend: $0.07
Previous Dividend: $0.32
Expected next dividend best case: $0.08
Expected next dividend worst case: $0.06
Average dividend payment (long-term): $0.08
Average dividend increase/decrease (growth rate) % per period: 0.46%
Expected next dividend payment date: 29/09/2022
Expected next dividend record date: 13/09/2022
-
Previous dividend payment date: 07/01/2022
Previous dividend record date: 15/06/2022
-
Dividend History:
2022-06-14--$0.07
2021-12-14--$0.06
2021-06-14--$0.09
2022-03-14--$0.07
2021-09-14--$0.06
2021-03-12--$0.09
Dividend growth rate is -98.05% lower than the industry average
In-depth Debt & Leverage Analysis
Debt to equity ratio:
876.16%
Net debt to equity ratio:
-0.83%
Debt to assets ratio:
89.76%
Net debt to assets ratio:
-0.10%
Debt-to-asset ratio is -46.09% below industry average
Ability to repay debt:
Interest coverage ratio:
8.91
Interest coverage ratio is 974.54% more than industry average
Looking forward:
Debt growth rate:
-16.35%
Annual debt growth is -5262% lower than industry average debt growth rate
Debt repayment rate in last quarter: 100.00%
Analysis of Key Statistics
Correlation of price movement with the market:
0.444
Statistical significance of correlation:
MBIN has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.501
Stock price is -11.40% less 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):
-0.013
Covariance of price movement with the market:
-0.023
Kurtosis
11.884
Returns have a significant 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:
-0.018
Returns are, approximately, symmetrical
Fundamental Analysis & Dupont Analysis of
MBIN
Gross Profit Margin Ratio:
200%
Operating Profit Margin Ratio:
0.00%
-
Net Profit Margin Ratio:
200%
Effective Tax Rate:
19.53%
Effective tax rate is -9.36% lower than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
19.42%
Return on equity (ROE) is 62.82% higher than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
2.39%
Return on assets (ROA) is 3.80% higher than the industry
Financial Leverage:
9.8x
Current Ratio:
0
-
Cash Conversion Cycle (days):
0
-
The remaining useful life of property plant & equipment is: 10.3 years
Stock based compensation to net income ratio:
-
In-depth Efficiency Analysis
Revenue generated per employee:
811.4K
Each employee generates 114% more revenue than industry average revenue per employee
EBITDA generated per employee:
677.5K
Each employee generates 200% more EBITDA than industry average revenue per employee
Profit generated per employee:
479.9K
Each employee generates 239% more net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
2.7M
Each employee generates 3139% more free cash flow than industry average revenue per employee
Assets/Capital per employee
36.2K
Each employee generates 3139% more free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
-
-
Competitors/Peer firms of
MBIN
SAFETY INSURANCE GROUP, INC. (XNAS:SAFT)
FIRST BANCORP (XNAS:FBNC)
StepStone Group Inc (XNAS:STEP)
CITY HOLDING COMPANY (XNAS:CHCO)
AMERISAFE, INC (XNAS:AMSF)
OCEANFIRST FINANCIAL CORP. (XNAS:OCFC)
BROOKLINE BANCORP, INC. (XNAS:BRKL)
1ST SOURCE CORPORATION (XNAS:SRCE)
STONEX GROUP INC. (XNAS:SNEX)
Current Analyst Ratings
Strong buy�4%
Buy�13%
Hold�0%
Sell�0%
Strong sell�0%
Overall analyst sentiment is: Buy
Income Statement
Period:
TTM
Date:
3/31/22
Revenue:
390.31M
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:
-
183.43M
-
71.04M
71.04M
-
- 21129.00K
2.20M
308.35M
36.59M
2.28M
325.89M
-
230.85M
287.62M
56.18M
230.85M
Statement of Cash Flow
Date:
Period:
591.00K
Differed Income Tax :
-
Stock Based Compensation :
-
Change in Working Capital :
6.32B
Accounts Receivables:
-
Other Working Capital:
6.32B
Other Non-Cash Items:
- 5095264.00K
Net Cash Provided by Operating Activities:
1.30B
Investments in PP&E:
-
Net Acquisitions:
-
Purchases of Investments:
1.09M
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
9.85M
314.27M
324.12M
6.00B
-
-
6.32B
34.56M
15.85M
1.57M
-
-
- 34559.00K
17.42M
3.34B
9.65B
-
-
-
-
-
-
-
-
30.70M
8.49B
8.46B
-
694.78M
- 6304.0K
500.03M
March 31, 2022 at 6:00:00 AM
-
1.19B
9.65B
-
-
- 9853.0K
9.30M
- 257541.00K
- 247149.00K
- 780025.00K
784.00K
-
- 8757.00K
- 881576.00K
- 1669574.00K
-
- 621093.00K
411.52M
1.03B
1.30B
-
1.30B
Our Proprietary Portfolio Rating
Our Rating:
D
Price Forecast/Expected Price in Next 5 Years of
MBIN
2023
2024
2025
2026
2027
$28.60
$56.43
$60.59
$65.06
$69.87