Conns Story

CONN -- USA Stock

USD 19.30 1.36 6.58%

Macroaxis Story

It looks like Lands End will be up for a correction way faster as its share price whent up 5.60% today to Conns's 1.8217%. As many rational traders are trying to avoid consumer cyclical space, it makes sense to outline Conns Inc a little further and understand how it stands against Lands End and other similar entities. We are going to inspect some of the competitive aspects of both Conns and Lands.

Published over two weeks ago

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Are Conns (NASDAQ:CONN) institutional investors shifting to Lands (NASDAQ:LE)?

By analyzing existing basic indicators between Conns and Lands, you can compare the effects of market volatilities on both companies' prices and check if they can diversify away market risk if combined in one of your portfolios. You can also utilize pair trading strategies for matching a long position in Lands with a short position in Conns. Check out our pair correlation module for more information.

Let's begin by analyzing the assets.

The asset utilization indicator refers to the revenue earned for every dollar of assets a company currently reports. Conns has an asset utilization ratio of 70.61 percent. This suggests that the company is making $0.71 for each dollar of assets. An increasing asset utilization means that Conns Inc is more efficient with each dollar of assets it utilizes for everyday operations.

Are Conns (NASDAQ:CONN) institutional investors shifting to Lands (NASDAQ:LE)?

Out of tens of thousands of stocks, funds, and ETFs that trade on global exchanges each represent an individual company which you can analyze using comparative analysis. To determine which one of the two companies, such as Conns or Lands is a better fit for your portfolio, analyzing a few basic fundamental indicators is a good first step.

How important is Conns's Liquidity

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

Correlation Between Conns and Lands End

In general, stock analysis is a method for investors and traders to make individual buying and selling decisions. Stock correlation analysis is also essential because it can help investors realize that they may not be as diversified as they think. Risk management strategies are usually required to make sure all portfolios are properly aligned against their risk tolerance level. You can consider holding Conns together with similar or unrelated positions with a negative correlation. For example, you can also add Lands End to your portfolio. If Lands End is not perfectly correlated to Conns it will diversify some of the market risks out of the positively correlated stocks in your portfolio. However, the disadvantage of this sort of hedging is that it can potentially affect your investment returns throughout market cycles. When Conns for example, for example, performs excellent and delivers stable returns, the negatively correlated position you locked in as a hedge may drag your returns down.

Please check pair correlation details between CONN and LE for more information.

Note

Are you currently holding both Conns and Lands End in your portfolio?

Please note if you are using this as a pair-trade strategy between Conns and Lands End, watch out for correlation discrepancy over time. Relying on the historical price correlations and assuming that it will not change may lead to short-term losses.

Conns exotic insider transaction detected

Legal trades by Conns 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:

Conns insider trading alert for general transaction of common stock by Douglas Martin, the corporate stakeholder, on 6th of April 2021. This event was filed by Conns Inc with SEC on 2021-04-06. Statement of changes in beneficial ownership - SEC Form 4 [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 it down a bit more

Revenue is income that a firm generates from business activities such us rendering services or selling goods to customers. It is a crucial part of a business and an essential item when evaluating a company's financial statements. Revenues from a firm's primary business operations can be reported on the income statement as sales revenue, net sales, or simply sales, depending on the industry in which a given company operates.
Revenue is typically recorded when cash or cash equivalents are exchanged for services or goods and can include product or services discounts, promotions, as well as early payments on invoices or services rendered in advance.

Revenue Breakdown

Let me now analyze Conns revenue. Based on the latest financial disclosure, Conns Inc reported 1.43 B of revenue. This is 79.94% lower than that of the Consumer Cyclical sector and 89.89% lower than that of the Specialty Retail industry. The revenue for all United States stocks is 84.84% higher than that of Conns. As for Lands End we see revenue of 1.43 B, which is 89.89% lower than that of the Specialty Retail

Sector

7.1 B

CONN	1.43 Billion	14.31
Sector	7.13 Billion	71.37
LE	1.43 Billion	14.31

Possible May reversion of Conns?

Latest variance is at 14.9. Conns Inc shows above-average downside volatility for the selected time horizon. We advise investors to inspect Conns Inc further and ensure that all market timing and asset allocation strategies are consistent with the estimation of Conns future alpha. Understanding different market volatility trends often help investors to time the market. Properly using volatility indicators enable traders to measure Conns' stock risk against market volatility during both bullying and bearish trends. The higher level of volatility that comes with bear markets can directly impact Conns' stock price while adding stress to investors as they watch their shares' value plummet. This usually forces investors to rebalance their portfolios by buying different stocks as prices fall.

Our Final Perspective on Conns

Whereas some companies under the specialty retail industry are still a bit expensive, Conns may offer a potential longer-term growth to institutional investors. With a relatively neutral outlook on the latest economy, it is better to hold off any trading of Conns 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 Conns.

About Contributor

Vlad Skutelnik is a Macroaxis Contributor. Vlad covers stocks, funds, cryptocurrencies, and ETFs that are traded in North America, focusing primarily on fundamentals, valuation and market volatility. He has many years of experience in fintech, predictive investment analytics, and risk management. View Profile

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 Vlad Skutelnik do not own shares of Conns Inc. Please refer to our Terms of Use for any information regarding our disclosure principles.

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