By analyzing existing basic indicators between Conns and Greenbrier, 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 Greenbrier 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 90.63 percent. This suggests that the company is making $0.91 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.
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 entities, such as Conns or Target 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. Financial leverage can amplify the potential profits to Conns' owners, but it also increases the potential losses and risk of financial distress, including bankruptcy, if the firm cannot cover its debt costs. The degree of Conns' financial leverage can be measured in several ways, including by ratios such as the debt-to-equity ratio (total debt / total equity), equity multiplier (total assets / total equity), or the debt ratio (total debt / total assets). Please check the
breakdown between Conns's total debt and its cash.
Correlation Between Conns and Target
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 Target to your portfolio. If Target 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, performs excellent and delivers stable returns, the negatively correlated position you locked in as a hedge may drag your returns down.
Are you currently holding both Conns and Target in your portfolio? Please note if you are using this as a pair-trade strategy between Conns and Target, 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. Please check
pair correlation details between CONN and TGT for more information.
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
Now, let's check Conns revenue. Based on the latest financial disclosure, Conns Inc reported 1.59
B of revenue. This is 77.7% lower than that of the Specialty Retail sector and 88.75% lower than that of the
Consumer Discretionary industry. The revenue for all United States stocks is 83.15% higher than that of Conns. As for Greenbrier Companies we see revenue of 2.98
B, which is 78.94% lower than that of the Consumer Discretionary
| CONN | 1.59 Billion | 13.59 |
| Sector | 7.13 Billion | 60.95 |
| GBX | 2.98 Billion | 25.46 |
Will Conns price slide impact its balance sheet?
Variance is down to 29.19. It may entail a possible volatility slide. Conns Inc exhibits very low volatility with skewness of -0.18 and kurtosis of 0.48. However, we advise investors to further study Conns Inc technical indicators to ensure that all market info is available and is reliable. 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 bullish 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 Take On Conns
Whereas few other entities in the specialty retail industry are either recovering or due for a correction, Conns may not be as strong as the others in terms of longer-term growth potentials. To sum up, as of the 6th of December 2022, our concluding 90 days 'Buy-Sell' recommendation on the company is
Hold. We believe Conns is
undervalued with
low chance of financial distress for the next two years.
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Ellen Johnson is a Member of Macroaxis Editorial Board. Ellen covers public companies in North America, focusing primarily on valuation and volatility. Six years of experience in 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 Ellen Johnson do not own shares of Conns Inc. Please refer to our
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