Guide to Day Traders: Ares Commercial Real Estate Corporation (NYSE:ACRE), Aetna Inc. (NYSE:AET)

On Tuesday, Shares of Ares Commercial Real Estate Corporation(NYSE:ACRE) showed 0.00% to $13.93. The company stated $1.25earnings per share (EPS) for the trailing twelve months. Earnings per share (EPS) are the portion of a company’s profit allocated to each outstanding share of common stock. Growth in EPS is an important measure of administration performance because it shows how much money the company is making for its shareholders, not only because of changes in profit, but also after all the effects of issuance of new shares (this is especially important when the growth comes as a result of acquisition). The Company’s Market capitalization is $404.39MB with the total Outstanding Shares of 29.03MM. The Company’s price to free cash flow for trailing twelve months is N/A. Its quick ratio for most recent quarter is N/A along with current ratio for most recent quarter of N/A, whereas Total long term debt to equity ratio for most recent quarter is 3.27.

 

Ares Commercial Real Estate Corporation (the “Company”) (ACRE), a specialty finance company engaged in originating and investing in commercial real estate assets, stated generally accepted accounting principles (“GAAP”) net income of $10.0M or $0.35 per diluted common share and Core Earnings of $10.3M or $0.36 per diluted common share for the third quarter of 2018. In addition, the Company declared that its Board of Directors declared a $0.02 per common share increase in the quarterly dividend to $0.31 per common share for the fourth quarter 2018 payable on January 15, 2019 to common stockholders of record as of December 28, 2018.

THREE MONTHS ENDED SEPTEMBER 30, 2018 FINANCIAL HIGHLIGHTS

Financial Results and Activities:

  • For the three months ended September 30, 2018, GAAP net income was $10.0M or $0.35 per diluted common share and Core Earnings were $10.3M or $0.36 per diluted common share.
  • For the three months ended September 30, 2018, new originations were $117.5M in commitments and $101.5M in outstanding principal funded at the origination date and an additional $8.4M of fundings on existing commitments.
  • For the three months ended September 30, 2018, the Company exited $198.3M of loans held for investment as measured by outstanding principal.

PORTFOLIO DETAIL AS OF SEPTEMBER 30, 2018

As of September 30, 2018, the Company’s portfolio included 44 loans held for investment, totaling about $1.9B in originated commitments at closing and $1.7B in outstanding principal. As of September 30, 2018, 69 loans totaling about $2.4B in outstanding principal were repaid or sold since inception of the Company.

RECENT DEVELOPMENTS

On October 2, 2018, the Company originated and fully funded a $17.5M pre-construction senior mortgage loan on a property with in-place development rights for a residential project located in Florida. The loan has a per annum interest rate of 30-day LIBOR plus a spread of 8.00% (plus fees) and an initial term of 1.5 years.

On October 22, 2018, the Company originated a $14.0M mezzanine construction loan on a property with in-place development rights for a residential conversion project located in New York. At closing, the outstanding principal balance was about $10.6M. The loan has a per annum interest rate of 30-day LIBOR plus a spread of 14.00% (plus fees) and an initial term of 2.5 years.

On October 26, 2018, the Company originated a $13.5M senior mortgage loan on an office property located in North Carolina. At closing, the outstanding principal balance was about $8.0M. The loan has a per annum interest rate of 30-day LIBOR plus a spread of 4.00% (plus fees) and an initial term of 4.0 years.

On October 30, 2018, the Company declared a cash dividend of $0.31 per common share for the fourth quarter of 2018. The fourth quarter 2018 dividend is payable on January 15, 2019 to common stockholders of record as of December 28, 2018.

THIRD QUARTER 2018 DIVIDEND

On July 26, 2018, the Company declared a cash dividend of $0.29 per common share for the third quarter of 2018. The third quarter 2018 dividend was paid on October 16, 2018 to common stockholders of record as of September 28, 2018.

On the Other hand, Shares of Aetna Inc. (NYSE:AET) remained 0.00% to $195.13. The last session saw more than 0 shares changing hands, while its earnings per share (EPS) stand at $10.91.

One way we can try to measure the level of fear in a given stock is through a technical analysis indicator called the Relative Strength Index, or RSI, which measures momentum on a scale of zero to 100. Traditionally the RSI is considered overbought when above 70 and oversold when below 30. Relative strength index (RSI-14) for Aetna Inc. (AET) is at 33.79. Investigating the productivity proportions of business stock, speculator will discover its ROE, ROA, ROI remaining at 21.60%, 6.10% and 9.90%, individually.

ATR remains at 2.29 while Beta component of the stock stands at 0.72. Beta element is utilized to gauge the volatility of the stock. The stock remained 1.47% volatile for the week and 1.10% for the month. Analysts’ mean recommendation on this stock is 2.50 and has been given an average price target of $206.27.

Aetna (AET) declared third-quarter 2018 net income(1) of $1.0B, or $3.03 per share. Adjusted earnings for third-quarter 2018 were $977M, or $2.96 per share. Aetna’s performance for the nine months ended September 30, 2018 resulted in net income of $3.4B, or $10.37 per share, and adjusted earnings of $3.2B, or $9.58 per share, for the nine months ended September 30, 2018.

Total Company Results

  • Net income was $1.0B for third-quarter 2018 contrast with $838M for third-quarter 2017. The increase in net income during third-quarter 2018 was mainly because of the increase in adjusted earnings described below and the favorable impact of a gain recognized as a result of the sale of Aetna’s domestic group life insurance, group disability insurance and absence management businesses (the “Group Insurance sale”) which occurred during fourth-quarter 2017, partially offset by net realized capital losses in third-quarter 2018 contrast to net realized capital gains in third-quarter 2017.
  • Adjusted earnings were $977M for third-quarter 2018 contrast with $814M for third-quarter 2017. The increase in adjusted earnings during third-quarter 2018 was mainly because of the favorable impact of the Tax Cuts and Jobs Act of 2017 (the “TCJA”) and higher pre-tax adjusted earnings in Aetna’s Health Care segment described below, partially offset by lower adjusted earnings because of the Group Insurance sale which occurred during fourth-quarter 2017. Adjusted earnings for third-quarter 2018 reflect a $130M pre-tax impact from an unfavorable provider arbitration ruling related to Aetna’s exited individual public health insurance exchange products.
  • Total revenue and adjusted revenue were $15.5B and $15.4B, respectively, for third-quarter 2018, and $15.0B and $14.9B, respectively, for third-quarter 2017. The increase in total revenue and adjusted revenue for third-quarter 2018 was mainly because of higher revenue in Aetna’s Heath Care segment described below, partially offset by lower revenue as a result of the Group Insurance sale which occurred during fourth-quarter 2017. Total revenue for third-quarter 2018 also reflects a gain recognized as a result of the Group Insurance sale.
  • Total company expense ratio was 17.7 percent and 17.4 percent for the third quarters of 2018 and 2017, respectively. The adjusted expense ratio was 17.7 percent and 17.5 percent for the third quarters of 2018 and 2017, respectively. The increase in both ratios for third-quarter 2018 was mainly because of the reinstatement of the health insurer fee (“HIF”) for 2018 and targeted investment spending on Aetna’s growth programs, partially offset by the continued execution of Aetna’s expense management programs.
  • After-tax net income margin was 6.5 percent and 5.6 percent for the third quarters of 2018 and 2017, respectively. The increase in the after-tax net income margin for third-quarter 2018 was mainly because of the favorable impact of the TCJA and strong performance in Aetna’s Medicare products, partially offset by the unfavorable provider arbitration ruling described above and lower favorable development of prior-periods’ health care cost estimates in Aetna’s Government business in third-quarter 2018 contrast to third-quarter 2017.
  • Adjusted pre-tax margin remained consistent at 9.2 percent for both the third quarters of 2018 and 2017. Third-quarter 2018 reflects strong performance in Aetna’s Medicare products and the reinstatement of the HIF for 2018, offset by the unfavorable provider arbitration ruling described above and lower favorable development of prior-periods’ health care cost estimates in Aetna’s Government business in third-quarter 2018 contrast to third-quarter 2017.
  • Total debt to capitalization ratio(6) reduced to 30.8 percent at September 30, 2018 contrast with 37.0 percent at December 31, 2017 mainly because of year-to-date net income during 2018 and repayment of $1.0B aggregate principal amount of Aetna’s senior notes during second-quarter 2018.
  • Effective tax rate was 27.4 percent for third-quarter 2018 contrast with 33.4 percent for third-quarter 2017. The decrease in Aetna’s effective tax rate for third-quarter 2018 was mainly because of the reduced corporate income tax rate specified in the TCJA, partially offset by the reinstatement of the non-deductible HIF for 2018.
  • Operating cash flow excluding large case pensions products as a percentage of net income was 116.0% during the nine months ended September 30, 2018.
  • Cash and investments at the parent were about $2.8B at September 30, 2018.
    • Aetna started the quarter with about $1.7B of cash and investments at the parent;
    • Net partner dividends to the parent were $1.3B in the quarter;
    • Aetna paid a shareholder dividend of $164M in the quarter; and
    • After other sources and uses, Aetna ended the quarter with about $2.8B of cash and investments at the parent.

Health Care Segment Results

Health Care, which provides a full range of insured and self-insured medical, pharmacy, dental and behavioral health products and services, stated:

  • Income before income taxes was about $1.3B for both the third quarters of 2018 and 2017. Pre-tax adjusted earnings were $1.4B for third-quarter 2018 contrast with $1.3B for third-quarter 2017. The increase in income before income taxes and pre-tax adjusted earnings was mainly because of strong performance in Aetna’s Medicare products and the favorable impact of the reinstatement of the HIF for 2018. The increases were partially offset by the unfavorable provider arbitration ruling described above and lower favorable development of prior-periods’ health care cost estimates in Aetna’s Government business in third-quarter 2018 contrast to third-quarter 2017. The increase in income before income taxes was mostly offset by net realized capital losses in third-quarter 2018 contrast to net realized capital gains in third-quarter 2017.
  • Total revenue and adjusted revenue were both $15.3B for third-quarter 2018 and both $14.3B for third-quarter 2017. The increase in total revenue and adjusted revenue was mainly because of membership growth in Aetna’s Medicare products, the adoption of new accounting guidance related to revenue recognition effective during first-quarter 2018 and the favorable impact of the reinstatement of the HIF for 2018. The increase was partially offset by lower membership in Aetna’s ACA compliant individual and small group Commercial products and its Medicaid products.
  • Medical membership at September 30, 2018 increased contrast with June 30, 2018. The increase mainly reflects increases in Aetna’s Commercial ASC, Medicare and Medicaid products, partially offset by decreases in Aetna’s Commercial Insured products.

Shares outstanding refers to all shares presently owned by stockholders, company officials, and investors in the public domain, but does not comprise shares repurchased by a company.

Shares that are outstanding comprise stock owned by the firm’s shareholders and owners. Shares outstanding does not comprise treasury stock, which are stock shares that are repurchased by the company. It also does not comprise unissued shares.

The number of shares outstanding is listed on a company’s balance sheet as “Capital Stock” and is stated on the company’s quarterly filings with the US Securities and Exchange Commission. The number of shares outstanding can also be found in the capital section of a company’s annual report.

WHY IT IS Important:

Outstanding shares are used in the calculation of market capitalization (outstanding shares multiplied by current share price) and earnings per share (EPS calculated as outstanding shares divided by earnings), two major measures of a company’s value and performance used by investors.

Now we will find outstanding shares of these two stocks

Firstly, Ares Commercial Real Estate Corporation (NYSE:ACRE)’s outstanding shares are $29.03M.  Secondly, Aetna Inc. (NYSE:AET)’s outstanding shares are $328.71M.

Grover Beam

Grover Beam has over 14 years experience in the financial services industry giving him a vast understanding of how news affects the financial markets. He is an active day trader spending the majority of her time analyzing earnings reports and watching commodities and derivatives. He has a Masters Degree in Economics from Westminster University with previous roles counting Investment Banking.

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