Citi Trends Story

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CTRN -- USA Stock  

USD 59.45  2.05  3.57%

It seems Citi Trends may not recover as fast as we have hopped for as its price went down 1.97% today. This firm's current daily volatility is 2.62 percent, with a beta of 1.18 and an alpha of 0.86 over DOW. Whilst many millenniums are getting more into investing against high market volatility, it is quite pruden to outline Citi Trends based on its historical prices. We will evaluate if Citi Trends shares are reasonably priced going into December.
Published over a month ago
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Chances of Citi Trends to slide after the volatility surges
Citi Trends currently holds roughly 146.75 M in cash with 77.94 M of positive cash flow from operations. This results in cash-per-share (CPS) ratio of 14.03. The asset utilization indicator refers to the revenue earned for every dollar of assets a company currently reports. Citi Trends has an asset utilization ratio of 230.94 percent. This suggests that the company is making $2.31 for each dollar of assets. An increasing asset utilization means that Citi Trends is more efficient with each dollar of assets it utilizes for everyday operations.
Investing in Citi Trends, just like investing in any other equity instrument, is characterized by a strong risk-return correlation. High risks mean high returns and low risk means lower expected returns. Risk management is the act of identifying and assessing the potential risk and developing strategies to minimize these risks and earn maximum possible profits while holding Citi Trends along with other instruments in the same portfolio. Using conventional technical analysis and fundamental analysis to select individual securities into a portfolio complements risk management and adds value to overall investors' investing strategies.
Sophisticated investors, who have witnessed many market ups and downs, frequently view the market will even out over time. This tendency of Citi Trends' stock price to converge to an average value over time is called mean reversion. However, historically, high market prices usually discourage investors that believe in mean reversion to invest, while low prices are viewed as an opportunity to buy. Please use the tools below to analyze the current value of Citi Trends in the context of predictive analytics.
Please note, it is not enough to conduct a financial or market analysis of a single entity such as Citi Trends. Your research has to be compared to or analyzed against Citi Trends' peers to derive any actionable benefits. When done correctly, Citi Trends' competitive analysis will give you plenty of quantitative and qualitative data to validate your investment decisions or develop an entirely new strategy towards taking a position in Citi Trends.

How important is Citi Trends's Liquidity

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

How Citi Trends utilizes its cash?

To perform a cash flow analysis of Citi Trends, investors first need to understand how to read the cash flow statement. A cash flow statement shows the amount of cash Citi Trends is receiving and how much cash it distributes out in a given period. The Citi Trends cash flow statement breaks down these inflows and outflows into different buckets, including operating activities, investing activities, and financing activities. Citi Trends 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 39.55 Million

Citi Trends Correlation with Peers

Investors in Citi Trends can reduce exposure to individual asset risk by holding a diversified portfolio of assets in addition to a long position in Citi Trends. Diversification will allow for the same portfolio return with reduced risk. The correlation table of Citi Trends and its peers is a two-dimensional matrix that shows the correlation coefficient between pairs of securities Citi Trends is related in some way. The cells in the table are color-coded to highlight significantly positive and negative relationships. Each cell shows the correlation between one pair of equities and can be used to run pair trading strategies or create efficient portfolios with your current brokerage. Please check volatility of Citi Trends for more details

Payment of 455 shares by Moschner Jason of Citi Trends subject to Rule 16b-3

Legal trades by Citi Trends 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:
Citi Trends insider trading alert for payment of common stock by Moschner Jason, VP Principal AO and Secretary, on 14th of January 2021. This event was filed by Citi Trends Inc with SEC on 2021-01-14. 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 down Citi Trends Indicators

Citi Trends appears to be very steady, given 1 month investment horizon. Citi Trends secures Sharpe Ratio (or Efficiency) of 0.32, which signifies that the company had 0.32% of return per unit of risk over the last month. Our standpoint towards foreseeing the volatility of a stock is to use all available market data together with stock specific technical indicators that cannot be diversified away. By analyzing Citi Trends technical indicators you can presently evaluate if the expected return of 0.85% is justified by implied risk. Please makes use of Citi Trends Downside Deviation of 2.06, mean deviation of 1.97, and Risk Adjusted Performance of 0.4771 to double-check if our risk estimates are consistent with your expectations.
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Our Citi Trends analysis suggests possible reversion in December

Citi Trends latest mean deviation surges over 1.97. Citi Trends currently demonstrates below-verage downside deviation. It has Information Ratio of 0.34 and Jensen Alpha of 0.86. However, we do advice investors to further question Citi Trends expected returns to ensure all indicators are consistent with the current outlook about its relatively low value at risk.

Our Bottom Line On Citi Trends

Whereas other entities within the apparel retail industry are still a little expensive, even after the recent corrections, Citi Trends may offer a potential longer-term growth to institutional investors. To summarize, as of the 30th of November 2020, we believe that at this point, Citi Trends is undervalued with low odds of financial distress within the next 2 years. Our overall buy-or-sell advice on the company is Strong Buy.

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 Citi Trends. Please refer to our Terms of Use for any information regarding our disclosure principles.

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