U.S. markets open in 2 hours 3 minutes
  • S&P Futures

    4,511.50
    +0.25 (+0.01%)
     
  • Dow Futures

    35,320.00
    -3.00 (-0.01%)
     
  • Nasdaq Futures

    15,411.25
    +12.75 (+0.08%)
     
  • Russell 2000 Futures

    2,268.60
    -4.20 (-0.18%)
     
  • Crude Oil

    82.03
    -0.93 (-1.12%)
     
  • Gold

    1,781.90
    +11.40 (+0.64%)
     
  • Silver

    24.00
    +0.12 (+0.49%)
     
  • EUR/USD

    1.1633
    -0.0004 (-0.03%)
     
  • 10-Yr Bond

    1.6350
    0.0000 (0.00%)
     
  • Vix

    15.64
    -0.67 (-4.11%)
     
  • GBP/USD

    1.3754
    -0.0039 (-0.29%)
     
  • USD/JPY

    114.4060
    +0.0460 (+0.04%)
     
  • BTC-USD

    63,824.84
    +1,691.95 (+2.72%)
     
  • CMC Crypto 200

    1,480.68
    +17.33 (+1.18%)
     
  • FTSE 100

    7,221.69
    +4.16 (+0.06%)
     
  • Nikkei 225

    29,255.55
    +40.03 (+0.14%)
     

What You Must Know About Moog Inc.'s (NYSE:MOG.A) Beta Value

  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
·4 min read
In this article:
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.

If you're interested in Moog Inc. (NYSE:MOG.A), then you might want to consider its beta (a measure of share price volatility) in order to understand how the stock could impact your portfolio. 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 see their prices move in concert with the market. Others tend towards stronger, gentler or unrelated price movements. Some investors use beta as a measure of how much a certain stock is impacted by market risk (volatility). While we should keep in mind that Warren Buffett has cautioned that 'Volatility is far from synonymous with risk', beta is still a useful factor to consider. To make good use of it you must first know that the beta of the overall market is one. Any stock with a beta of greater than one is considered more volatile than the market, while those with a beta below one are either less volatile or poorly correlated with the market.

Check out our latest analysis for Moog

What MOG.A's beta value tells investors

Zooming in on Moog, we see it has a five year beta of 1.54. This is above 1, so historically its share price has been influenced by the broader volatility of the stock market. If this beta value holds true in the future, Moog shares are likely to rise more than the market when the market is going up, but fall faster when the market is going down. 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 Moog fares in that regard, below.

NYSE:MOG.A Income Statement May 7th 2020
NYSE:MOG.A Income Statement May 7th 2020

Does MOG.A's size influence the expected beta?

Moog is a small company, but not tiny and little known. It has a market capitalisation of US$1.5b, which means it would be on the radar of intstitutional investors. It has a relatively high beta, which is not unusual among small-cap stocks. Because it takes less capital to move the share price of a smaller company, actively traded small-cap stocks often have a higher beta that a similar large-cap stock.

What this means for you:

Since Moog has a reasonably high beta, it's worth considering why it is so heavily influenced by broader market sentiment. For example, it might be a high growth stock or have a lot of operating leverage in its business model. This article aims to educate investors about beta values, but it's well worth looking at important company-specific fundamentals such as Moog’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 MOG.A’s future growth? Take a look at our free research report of analyst consensus for MOG.A’s outlook.

  2. Past Track Record: Has MOG.A 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 MOG.A's historicals for more clarity.

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

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.

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. Thank you for reading.