Frontline Stock Story

FRO -  USA Stock  

USD 7.55  0.07  0.92%

It seems Frontline may not have a good chance to recover from the latest slide as its shares fell again. The company current daily volatility is 2.89 percent, with a beta of 1.17 and an alpha of -0.09 over DOW. As many baby boomers are still indifferent towards current volatility, Frontline. We will evaluate why recent Frontline price moves suggest a bounce in December.
Published over a month ago
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How risky is Frontline after the latest volatility rise?
Frontline has roughly 143.03 M in cash with 199.77 M of positive cash flow from operations. This results in cash-per-share (CPS) ratio of 0.72.
We provide trade advice to complement the prevailing expert consensus on Frontline. Our dynamic recommendation engine uses a multidimensional algorithm to analyze the company's potential to grow using all technical and fundamental data available at the time.
Investing in Frontline, 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 Frontline 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, frequently view the market will even out over time. This tendency of Frontline'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. Please use the tools below to analyze the current value of Frontline in the context of predictive analytics.
Please note, it is not enough to conduct a financial or market analysis of a single entity such as Frontline. Your research has to be compared to or analyzed against Frontline's peers to derive any actionable benefits. When done correctly, Frontline's competitive analysis will give you plenty of quantitative and qualitative data to validate your investment decisions or develop an entirely new strategy towards taking a position in Frontline.

How important is Frontline's Liquidity

Frontline financial leverage refers to using borrowed capital as a funding source to finance Frontline ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. Frontline 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. Please check the breakdown between Frontline's total debt and its cash.

How does Frontline utilize its cash?

To perform a cash flow analysis of Frontline, investors first need to understand how to read the cash flow statement. A cash flow statement shows the amount of cash Frontline is receiving and how much cash it distributes out in a given period. The Frontline cash flow statement breaks down these inflows and outflows into different buckets, including operating activities, investing activities, and financing activities.
Frontline Net Cash Flow from Operations is quite stable at the moment as compared to the past year. The company's current value of Net Cash Flow from Operations is estimated at 749.51 Million

Frontline Correlation with Peers

Investors in Frontline can reduce exposure to individual asset risk by holding a diversified portfolio of assets in addition to a long position in Frontline. Diversification will allow for the same portfolio return with reduced risk. The correlation table of Frontline and its peers is a two-dimensional matrix that shows the correlation coefficient between pairs of securities Frontline 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 Frontline for more details

A Deeper Perspective

Frontline secures Sharpe Ratio (or Efficiency) of -0.0187, which denotes the company had -0.0187% of return per unit of risk over the last 3 months. Macroaxis standpoint towards predicting the risk of any stock is to look at both systematic and unsystematic factors of the business, including all available market data and technical indicators. Frontline exposes twenty-seven different technical indicators, which can help you to evaluate volatility that cannot be diversified away. Please be advised to confirm Frontline mean deviation of 2.33, and Coefficient Of Variation of (2,597) to check the risk estimate we provide.
Click cells to compare fundamentals   Check Volatility   Backtest Portfolio

Frontline bad news reports are not so bad

Latest mean deviation is at 2.33. Frontline exhibits very low volatility with skewness of 0.12 and kurtosis of -0.35. However, we advise investors to further study Frontline technical indicators to make sure all market info is available and is reliable. Understanding different market volatility trends often help investors to time the market. Properly using volatility indicators enable traders to measure Frontline's stock risk against market volatility during both bullying and bearish trends. The higher level of volatility that comes with bear markets can directly impact Frontline's stock price while adding stress to investors as they watch their shares' value plummet. This usually forces investors to rebalance their portfolios by buying different stocks as prices fall.

Frontline Implied Volatility

Frontline's implied volatility exposes the market's sentiment of Frontline stock's possible movements over time. However, it does not forecast the overall direction of its price. In a nutshell, if Frontline's implied volatility is high, the market thinks the stock has potential for high price swings in either direction. On the other hand, the low implied volatility suggests that Frontline stock will not fluctuate a lot when Frontline's options are near their expiration.

Our Conclusion on Frontline

Whereas some other entities in the oil & gas midstream industry are either recovering or due for a correction, Frontline may not be as strong as the others in terms of longer-term growth potentials. With a somewhat neutral outlook on your 90 days horizon, it may be better to hold off any trading activity and neither pick up new shares of Frontline nor short your existing holdings in the Stock. It seems the expected volatility has not yet been fully factored into the current price. Please use our equity advice module to run different scenarios to ensure your current risk level and investment horizon are fully reflective of your current investing preferences in regards to Frontline.

Editorial 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 Raphi Shpitalnik do not own shares of Frontline. Please refer to our Terms of Use for any information regarding our disclosure principles.

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