Continental Story

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CAL -- USA Stock  

USD 9.76  0.10  1.04%

Continental is scheduled to announce its earnings today. The next earnings report is expected on the 23rd of November 2020. As many of us are excited about consumer cyclical space, it is fair to summarize Caleres as a unique alternative. Here we also measure the ability of Continental to meet its long-term debt obligations, such as interest payments on debt, the final principal payment on the debt, and any other fixed obligations like lease payments.
Published over three weeks ago
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Chances of Continental (NYSE:CAL) to pull down in October
Continental has 1.4 B in debt with debt to equity (D/E) ratio of 4.9, demonstrating that Continental may be unable to create cash to meet all of its financial commitments. The entity has a current ratio of 0.92, suggesting that it has not enough short term capital to pay financial commitments when the payables are due.
Continental financial leverage ratio helps determine the effect of debt on the overall profitability of the company. It measures the total debt position of Continental, including all of Continental's outstanding debt obligations, and compares it with the equity. In simple terms, the high financial leverage means the cost of production, together with running the business day-to-day, is high, whereas, lower financial leverage implies lower fixed cost investment in the business and generally considered by investors to be a good sign. So if creditors own a majority of Continental assets, the company is considered highly leveraged. Understanding the composition and structure of overall Continental debt and outstanding corporate bonds gives a good idea of how risky the capital structure of a business is and if it is worth investing in it. Please read more on our technical analysis page.

Understanding Continental Total Liabilities

Continental liabilities are broken down into two parts on the balance sheet. These are short-term (or current) obligations and long-term debt. Continental has to fulfill its short-term liabilities in this reporting year and should be no more than 12 months old. Long-term debt, on the other hand, is anything beyond the 12-month payment timeframe. Common short-term liabilities found on Continental balance sheet include debt obligations and money owed to different Continental vendors, workers, and loan providers. Below is the chart of Continental short long-term liabilities accounts currently reported on its balance sheet.
You can use Caleres financial leverage analysis tool to get a better grip on understanding its financial position

How important is Continental's Liquidity

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

A Deeper Perspective

The firm reported the last year's revenue of 2.64 B. Reported Net Loss for the year was (293.81 M) with profit before taxes, overhead, and interest of 1.19 B.

Liabilities Breakdown

642.4 M
Current Liabilities
649.9 M
Long-Term Liabilities
Total Liabilities1.29 Billion
Current Liabilities642.36 Million
Long-Term Liabilities649.89 Million
Tax Liabilities54.64 Million

Will Continental pull back in October 2020?

New jensen alpha is at -0.28. As of the 1st of September, Continental shows the Downside Deviation of 6.55, mean deviation of 5.05, and Risk Adjusted Performance of 0.0542. Continental technical analysis gives you the methodology to make use of historical prices and volume patterns to determine a pattern that approximates the direction of the firm's future prices. Put another way, you can use this information to find out if the firm will indeed mirror its model of historical prices and volume momentum, or the prices will eventually revert. We were able to interpolate data for nineteen technical drivers for Caleres, which can be compared to its rivals. Please confirm Continental treynor ratio, and the relationship between the variance and potential upside to decide if Continental is priced correctly, providing market reflects its regular price of 7.81 per share. Given that Continental has jensen alpha of (0.28), we suggest you to validate Caleres's prevailing market performance to make sure the company can sustain itself at a future point.

Our Conclusion on Continental

While other companies under the footwear & accessories industry are still a bit expensive, Continental may offer a potential longer-term growth to stakeholders. With a relatively neutral outlook on the new economy, it is better to hold off any trading of Continental as the current risk-reward utility is not appealing enough. 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 Continental.

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

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