Arcos Story

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ARCO -- USA Stock  

USD 4.14  0.13  3.04%

As many millenniums are excited about consumer cyclical space, it is only fair to outline Arcos Dorados Holdings against current market trends. As we have suggested previously, Arcos Dorados is beginning its slide as institutional investors shift to be more bearish due to the increased sector volatility. Arcos Dorados Holdings responds to the market. Plenty of the changes of the company stock price movements has been a rough indication of what is happening in the market overall. Persistent basic indicators of the company may entail signs of short-term price drift for institutional investors. Arcos Dorados Holdings is scheduled to announce its earnings today. The next earnings report is expected on the 11th of November 2020.
Published over a month ago
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Our latest technical analysis of Arcos Dorados Holdings (NYSE:ARCO)
This firm's average rating is Strong Buy from 3 analysts. Do analysts base this consensus on technical analyses? We know that typical technical analysis utilizes price momentum, patterns, and trends looking at historical prices. It aims to identify signals based on Arcos Dorados market sentiment investors' perception of the future value of Arcos. Let us look at a few aspects of Arcos technical analysis. The company has Profit Margin (PM) of 0.54 %, which maeans that even a very small decline in it revenue will erase profits resulting in a net loss. This is way below average. Similarly, it shows Operating Margin (OM) of 8.92 %, which suggests for every 100 dollars of sales, it generated a net operating income of 0.09.
Using predictive technical analysis, we will analyze different prices and returns patterns and diagnose historical swings to determine the real value of Arcos Dorados Holdings. In general, we focus on analyzing Arcos Dorados stock price patterns and their correlations with different microeconomic environment and drivers. We also apply predictive analytics to build Arcos Dorados's daily price indicators and compare them against related drivers such as momentum indicators and various other types of predictive indicators. Using this methodology combined with a more conventional technical analysis and fundamental analysis, we attempt to find the most accurate representation of Arcos Dorados's intrinsic value. In addition to deriving basic predictive indicators for Arcos Dorados, we also check how macroeconomic factors affect Arcos Dorados price patterns. Please read more on our technical analysis page or use our predictive modules below to complement your research.

How does Arcos Stands against Peers?

Analyzing Arcos Dorados competition or peers my help you to expand the diversification possibilities of your existing portfolios and to get a better perspective on locking in new positions. Try to analyze the advantages of investing in traded instruments related to Arcos Dorados across multiple sectors and thematic ideas. A good competitive analysis can cover a lot of different areas. But what areas to choose depends on who you are. The more exhaustive you are in your analysis, the more effective your competitive analysis will be.
Check out Arcos Dorados Competition Details

How Arcos utilizes its cash?

To perform a cash flow analysis of Arcos Dorados, investors first need to understand how to read the cash flow statement. A cash flow statement shows the amount of cash Arcos Dorados is receiving and how much cash it distributes out in a given period. The Arcos Dorados cash flow statement breaks down these inflows and outflows into different buckets, including operating activities, investing activities, and financing activities. Arcos Dorados 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 203.71 Million

Closer look at Arcos Dorados Downside Variance

Arcos Dorados Holdings has current Downside Variance of 14.74. Downside Variance (or DV) is measured by target semi-variance and is termed downside volatility. It is expressed in percentages and therefore allows for rankings in the same way as variance. One way to view downside volatility is the annualized variance of returns below the target.

Downside Variance is the probability-weighted squared below-target returns. The squaring of the below-target returns has the effect of penalizing failures at an exponential rate. This is consistent with observations made on the behavior of individual decision-making under.

Downside Variance 
 = 
SUM(RET DEV)2 
N(ER) 
 = 
14.74
SUM = Summation notation
RET DEV = Actual returns deviation over selected period
N(ER) = Number of points with returns less than expected return for the period
Let's now compare Arcos Dorados Downside Variance to its closest peers:
ARCO
BH
DNKN
BBQ
BDL
ARCO14.73930656993977
BH26.11
DNKN4.3
BBQ18.22
BDL7.93

Will Arcos price slide impact its balance sheet?

The jensen alpha is down to 0.13 as of today. Arcos Dorados Holdings shows above-average downside volatility for the selected time horizon. We advise investors to inspect Arcos Dorados Holdings further and ensure that all market timing and asset allocation strategies are consistent with the estimation of Arcos Dorados future alpha.

Our Takeaway on Arcos Dorados Investment

Whereas some other entities in the restaurants industry are either recovering or due for a correction, Arcos Dorados may not be performing as strong as the other in terms of long-term growth potentials. While some institutional investors may not share our view we believe that the current risk-reward utility is not appealing enough to do any trading. 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 Arcos Dorados.

About Contributor

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 Ellen Johnson do not own shares of Arcos Dorados Holdings. Please refer to our Terms of Use for any information regarding our disclosure principles.

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