Culp Story

<div class='circular--portrait' style='background:#FF6600;color: #FFFAFA;font-size:3em;'>CUL</div>
CULP -- USA Stock  

USD 14.70  0.56  3.96%

Culp Free Cash Flow is very stable at the moment as compared to the past year. Culp reported last year Free Cash Flow of 1.06 Million. As of 2nd of September 2020, Invested Capital Average is likely to grow to about 129.3 M, while Working Capital is likely to drop about 88.2 M. The underlying rationale for this short perspective is to recap Culp as an investment oportunity for October. We will focus on why recent Culp price moves suggest a bounce in October.
Published over two months ago
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Are Culp (NYSE:CULP) insiders starting to hold back?
Culp Inc has a beta of 0.2522. Let's try to break down what Culp's beta means in this case. Culp returns are very sensitive to returns on the market. As the market goes up or down, Culp is expected to follow. The beta indicator helps investors understand whether Culp moves in the same direction as the rest of the market, and how volatile (i.e., risky) it is compared to the market (i.e., selected benchmark). In other words, if Culp deviates very little from the market, it does not add much risk to the portfolio, but it also doesn't increase the expected returns.
There are currently many different techniques concerning forecasting the market as a whole as well as predicting future values of individual securities such as Culp Inc. Regardless of method or technology, to accurately forecast the stock market is more a matter of luck rather than a particular technique. Nevertheless, trying to predict the stock market accurately is still an essential part of the overall investment decision process. Using different forecasting techniques and comparing the results might improve your chances of accuracy even though unexpected events may often change the market sentiment and impact your forecasting results.

Predictive Modules for Culp

How important is Culp's Liquidity

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

How Culp utilizes its cash?

To perform a cash flow analysis of Culp, investors first need to understand how to read the cash flow statement. A cash flow statement shows the amount of cash Culp is receiving and how much cash it distributes out in a given period. The Culp cash flow statement breaks down these inflows and outflows into different buckets, including operating activities, investing activities, and financing activities. Culp Net Cash Flow from Operations is very stable at the moment as compared to the past year. Culp reported last year Net Cash Flow from Operations of 4.97 Million

Breaking down Culp Indicators

The recent price roll up of Culp Inc could raise concerns from insiders as the firm closed today at a share price of 11.51 on 53,460 in volume. The company executives may have good odds in positioning the firm resources to exploit market volatility in October. The stock standard deviation of daily returns for 30 days investing horizon is currently 4.43. This high volatility is attributed to the latest market swings and not so good earnings reports for some of the Culp partners.

Returns Breakdown

Return on Investment8.99
Return on Assets(0.005263)
Return on Equity(0.0147)
Return Capital0.0274
Return on Sales(0.001579)

Our perspective of the recent Culp roll up

The sortino ratio is down to 0.18 as of today. Culp Inc shows above-average downside volatility for the selected time horizon. We advise investors to inspect Culp Inc further and ensure that all market timing and asset allocation strategies are consistent with the estimation of Culp future alpha.

Our Takeaway on Culp Investment

Although some companies under the textile manufacturing industry are still a bit expensive, Culp may offer a potential longer-term growth to insiders. To conclude, as of the 2nd of September 2020, our research shows that Culp is a rather somewhat reliable investment opportunity with a low odds of financial distress in the next two years. From a slightly different view, the entity currently appears to be overvalued. Our primary 30 days 'Buy-Sell' recommendation on the firm is Hold.

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 Culp Inc. Please refer to our Terms of Use for any information regarding our disclosure principles.

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