Town Sports Story

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CLUB -- USA Stock  

USD 0.07  0.011  18.33%

Town Sports Average Assets are projected to increase significantly based on the last few years of reporting. The past year's Average Assets were at 831.09 Million. The current year Earnings Before Interest Taxes and Depreciation Amortization EBITDA is expected to grow to about 45.6 M, whereas Earnings before Tax are forecasted to decline to (18.8 M). One of the important factors of profitable assets selection is to know the future growth potential of an asset before buying its shares. This post will go over Town Sports. Will investors continue to hold, or should we expect a sell-off?
Published over a month ago
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Are Town Sports (NASDAQ:CLUB) weak basic indicators contributing to the current slip?
Town Sports is UNDERVALUED at 0.94 per share with modest projections ahead. Town Sports Internat owns Efficiency Ratio (i.e. Sharpe Ratio) of -0.0589, which indicates the firm had -0.0589% of return per unit of risk over the last month. Macroaxis standpoint towards measuring the risk of any stock is to look at both systematic and unsystematic factors of the business, including all available market data and technical indicators. Town Sports International exposes twenty-eight different technical indicators, which can help you to evaluate volatility that cannot be diversified away. Please be advised to validate Town Sports coefficient of variation of (795.52), and Risk Adjusted Performance of (0.13) to confirm the risk estimate we provide.
Typically, a company's financial statements are the reports that show the financial position of the company. There are three main documents that fall into the category of financial statements. These documents include Town Sports income statement, its balance sheet, and the statement of cash flows. Potential Town Sports investors and stakeholders use financial statements to determine how well the company is positioned to perform in the future. Although Town Sports investors may use each financial statement separately, they are all related. The changes in Town Sports's assets and liabilities, for example, are also reflected in the revenues and expenses that we see on Town Sports's income statement, which results in the company's gains or losses. Cash flows can provide more information regarding cash listed on a balance sheet, but not equivalent to net income shown on the income statement. Please read more on our technical analysis and fundamental analysis pages. The goal of Town Sports fundamental analysis is to do accurate financial forecasts. There are several possible objectives to fundamental analysis, such as projecting of Town Sports performance into the future periods or doing a reasonable stock valuation. The intrinsic value of Town Sports shares is the value that is considered the true value of the share. If the intrinsic value Town Sports is higher than its market price, buying is generally recommended. If it is equal to the market price, it is recommended to hold; and if it is less than the market price, then one should sell all shares Town Sports. Please read more on our fundamental analysis page.

Watch out for price decline

Please consider monitoring Town Sports on a daily bases if you are holding a position in it. Town Sports is trading at a penny-stock level, and the possibility of delisting is much higher compared to other equities. However, just because the stock is trading under one dollar, does not mean it will be marked for deletion. Most exchanges require public instruments, such as Town Sports stock to be traded above the $1 level to remain listed. If Town Sports stock price falls below $1 for 30 consecutive trading days, the exchange can delist it. Once the company reaches this point, they will be sent an initial price violation notice directly from an exchange.

How important is Town Sports's Liquidity

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

How Town Sports utilizes its cash?

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

Purchase by Patrick Walsh of 40681 shares of Town Sports

Legal trades by Town Sports insiders are very common, as founders, directors, or employees of any publicly traded firm often have stock or stock options. These trades are made public in the United States through the filing of Form 4 of the Securities and Exchange Commission. Below entry was recorded recently and is publicly available as an insider trade:
Town Sports insider trading alert for perchase of common stock $0.001 par value by Patrick Walsh, Chief Executive Officer, on 22nd of September 2020. This event was filed by Town Sports International with SEC on 2019-05-02. Statement of changes in beneficial ownership - SEC Form 4. Patrick Walsh currently serves as executive chairman and member of executive committee of Town Sports Internat [view details]   
Note, although insider trading is legal, in the United States, Canada, Australia, and Germany, for mandatory reporting purposes, corporate insiders are defined as a company's officers, directors, and any beneficial owners of more than 10% of a class of the company's equity securities.

Breaking down Town Sports Indicators

Although in the United States, the Securities and Exchange Commission has enforced strong rules to prevent insiders from engaging in insider trading, finding insiders among active shareholders of Town Sports is not uncomon. Institutional investor usually refers to an organization that invests money in Town Sports on behalf of clients or other money managers. Buying and selling of large positions of Town Sports stock by institutional investors can create supply and demand imbalances that result in sudden price moves of Town Sports stock. Let's take a look at how the ownership of Town Sports is distributed among investors.

Ownership Allocation

Town Sports Internat shows a total of twenty-nine million seven hundred twenty thousand outstanding shares. Over half of Town Sports Internat outstanding shares are owned by institutional holders. These institutional holders are typically referred to corporate investors that take positions in a given instrument to benefit from reduced trade commissions. Consequently, these institutions are subject to different rules and regulation than regular investors in Town Sports Internat. Please watch out for any change in the institutional holdings of Town Sports as this could mean something significant has changed or about to change at the company. Please note that no matter how much assets the company owns, if the real value of the company is less than the current market value, you may not be able to make money on it.

Retail Investors
Retail Investors28.74

Asset Utilization

The asset utilization indicator refers to the revenue earned for every dollar of assets a company currently reports. Town Sports has an asset utilization ratio of 147.88 percent. This suggests that the company is making $1.48 for each dollar of assets. An increasing asset utilization means that Town Sports International is more efficient with each dollar of assets it utilizes for everyday operations.

Assets Non Current
821.6 M
Current Assets48 Million5.32
Assets Non Current821.59 Million90.98
Goodwill32.57 Million3.61
Tax Assets887,7630.0983

Will Town Sports growth be viable after the rise?

Current skewness is at 1.34. Town Sports International is displaying above-average volatility over the selected time horizon. Investors should scrutinize Town Sports International independently to ensure intended market timing strategies are aligned with expectations about Town Sports volatility. Town Sports International is a potential penny stock. Although Town Sports may be in fact a good instrument to invest, many penny stocks are speculative in nature and are subject to artificial price hype. Please make sure you totally understand the upside potential and downside risk of investing in Town Sports International. We encourage investors to look for the signals such us email spams, message board hypes, claims of breakthroughs, volume upswings, sudden news releases, promotions that are not reported, or demotions released before SEC filings. Please also check biographies and work history of current and past company officers before investing in high volatility instruments, penny stocks, or equities with microcap classification. You can indeed make money on this equity instrument if you perfectly time your entry and exit. However, remember that penny stocks that have been the subject of an artificial hype usually unable to maintain its increased share price for more than just a few days. The price of a promoted high volatility instrument will almost always revert back. The only way to increase shareholder value is through legitimate performance backed up by solid fundamentals.

The Bottom Line

Whereas other companies within the leisure industry are still a little expensive, even after the recent corrections, Town Sports may offer a potential longer-term growth to investors. To conclude, as of the 17th of September 2020, our primary 30 days buy-or-sell advice on the company is Strong Sell. However, we believe Town Sports is currently undervalued with close to average chance of bankruptcy for the next two years.

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 Achuva Shats do not own shares of Town Sports International. Please refer to our Terms of Use for any information regarding our disclosure principles.

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