U.S. markets closed
  • S&P Futures

    4,160.75
    +5.25 (+0.13%)
     
  • Dow Futures

    34,018.00
    +60.00 (+0.18%)
     
  • Nasdaq Futures

    13,908.50
    +11.25 (+0.08%)
     
  • Russell 2000 Futures

    2,228.70
    -0.60 (-0.03%)
     
  • Crude Oil

    63.57
    +0.19 (+0.30%)
     
  • Gold

    1,768.90
    -1.70 (-0.10%)
     
  • Silver

    25.85
    +0.02 (+0.07%)
     
  • EUR/USD

    1.2042
    +0.0001 (+0.01%)
     
  • 10-Yr Bond

    1.6010
    +0.0280 (+1.78%)
     
  • Vix

    17.29
    +1.04 (+6.40%)
     
  • GBP/USD

    1.3983
    -0.0001 (-0.01%)
     
  • USD/JPY

    108.2000
    +0.0500 (+0.05%)
     
  • BTC-USD

    54,872.55
    -1,122.09 (-2.00%)
     
  • CMC Crypto 200

    1,228.57
    -70.39 (-5.42%)
     
  • FTSE 100

    7,000.08
    -19.45 (-0.28%)
     
  • Nikkei 225

    29,179.08
    -506.29 (-1.71%)
     

What Kind Of Share Price Volatility Should You Expect For bpost SA/NV (EBR:BPOST)?

  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
Simply Wall St
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.

If you own shares in bpost SA/NV (EBR:BPOST) then it's worth thinking about how it contributes to the volatility of your portfolio, overall. In finance, Beta is a measure of volatility. Modern finance theory considers volatility to be a measure of risk, and there are two main types of price volatility. The first type is company specific volatility. Investors use diversification across uncorrelated stocks to reduce this kind of price volatility across the portfolio. The other type, which cannot be diversified away, is the volatility of the entire market. Every stock in the market is exposed to this volatility, which is linked to the fact that stocks prices are correlated in an efficient market.

Some stocks mimic the volatility of the market quite closely, while others demonstrate muted, exagerrated or uncorrelated price movements. Beta is a widely used metric to measure a stock's exposure to market risk (volatility). Before we go on, it's worth noting that Warren Buffett pointed out in his 2014 letter to shareholders that 'volatility is far from synonymous with risk.' Having said that, beta can still be rather useful. The first thing to understand about beta is that the beta of the overall market is one. A stock with a beta below one is either less volatile than the market, or more volatile but not corellated with the overall market. In comparison a stock with a beta of over one tends to be move in a similar direction to the market in the long term, but with greater changes in price.

Check out our latest analysis for bpost

What BPOST's beta value tells investors

Zooming in on bpost, we see it has a five year beta of 1.14. This is above 1, so historically its share price has been influenced by the broader volatility of the stock market. Based on this history, investors should be aware that bpost are likely to rise strongly in times of greed, but sell off in times of fear. Share price volatility is well worth considering, but most long term investors consider the history of revenue and earnings growth to be more important. Take a look at how bpost fares in that regard, below.

ENXTBR:BPOST Income Statement, August 26th 2019
ENXTBR:BPOST Income Statement, August 26th 2019

Does BPOST's size influence the expected beta?

bpost is a reasonably big company, with a market capitalisation of €1.8b. Most companies this size are actively traded with decent volumes of shares changing hands each day. It takes a lot of money to influence the share price of large companies like this one. That makes it interesting to note that its share price has a history of sensitivity to market volatility. There might be some aspect of the business that means profits are leveraged to the economic cycle.

What this means for you:

Since bpost tends to moves up when the market is going up, and down when it's going down, potential investors may wish to reflect on the overall market, when considering the stock. This article aims to educate investors about beta values, but it's well worth looking at important company-specific fundamentals such as bpost’s financial health and performance track record. I urge you to continue your research by taking a look at the following:

  1. Future Outlook: What are well-informed industry analysts predicting for BPOST’s future growth? Take a look at our free research report of analyst consensus for BPOST’s outlook.

  2. Past Track Record: Has BPOST been consistently performing well irrespective of the ups and downs in the market? Go into more detail in the past performance analysis and take a look at the free visual representations of BPOST's historicals for more clarity.

  3. Other Interesting Stocks: It's worth checking to see how BPOST measures up against other companies on valuation. You could start with this free list of prospective options.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.