AIM:AXM Income Statement Jan 15th 18
How AXM’s assets could affect its beta
An asset-heavy company tends to have a higher beta because the risk associated with running fixed assets during a downturn is highly expensive. I examine AXM’s ratio of fixed assets to total assets to see whether the company is highly exposed to the risk of this type of constraint. Considering fixed assets is virtually non-existent in AXM’s operations, it has low dependency on fixed costs to generate revenue. As a result, the company may be less volatile relative to broad market movements, compared to a company of similar size but higher proportion of fixed assets. This outcome contradicts AXM’s current beta value which indicates an above-average volatility.
What this means for you:
Are you a shareholder? You could reap the gains of AXM’s returns in times of an economic boom. However, during a downturn, a more defensive stock can cushion the impact of this risk. Depending on the composition of your portfolio, high-beta stocks such as AXM is valuable to pump up your returns, in particular, during times of economic growth. For more company-specific research on AXM, check out our our free analysis plaform here.
Are you a potential investor? Before you buy AXM, you should take into account how their portfolio currently moves with the market, in addition to the current economic environment. AXM may be a valuable addition to portfolios during times of economic growth, and it may be work looking further into fundamental factors such as current valuation and financial health. Continue your research on the stock with our free fundamental research report for AXM here.
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.