What should I buy Yum China (USA Stocks:YUMC) or ESSA Pharma (USA Stocks:EPIX)?

EPIX Stock

USD 2.95 0.01 0.34%

Macroaxis Story

It looks like Yum China will be up for a correction faster as its share price went up 2.6% today to ESSA Pharma's 4.13%. While some baby boomers are getting worried about biotechnology space, we are going to break down both, ESSA Pharma and Yum China as potential short-term investments. We are going to inspect some of the competitive aspects of both ESSA Pharma and Yum China.

Published over a month ago

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By analyzing existing forward indicators between ESSA Pharma and Yum China, 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 Yum China with a short position in ESSA Pharma. Check out our pair correlation module for more information.

Let's begin by analyzing the assets.

One of the ways to look at asset utilization of ESSA Pharma is to check how much profit was generated for every dollar of assets it reports. ESSA Pharma shows a negative utilization of assets of -0.13 percent, losing $0.001287 for each dollar of assets held by the firm. Ineffective asset utilization denotes the company is being less competent with each dollar of assets it shows. Put another way, asset utilization of ESSA Pharma shows how unsuccessful it operates for each dollar spent on its assets.

What should I buy Yum China (USA Stocks:YUMC) or ESSA Pharma (USA Stocks:EPIX)?

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 ESSA Pharma or Mustang is a better fit for your portfolio, analyzing a few basic fundamental indicators is a good first step.

How important is ESSA Pharma's Liquidity

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

Correlation Between ESSA Pharma and Mustang Bio

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 ESSA Pharma together with similar or unrelated positions with a negative correlation. For example, you can also add Mustang Bio to your portfolio. If Mustang Bio is not perfectly correlated to ESSA Pharma 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 ESSA Pharma, 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 EPIX and MBIO for more information.

Sale by Franklin Berger of 43617 shares of ESSA Pharma

Legal trades by ESSA Pharma 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:

ESSA Pharma insider trading alert for sale of common shares by Franklin Berger, the corporate stakeholder, on 5th of January 2023. This event was filed by Essa Pharma Inc with SEC on 2023-01-05. 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 the case for ESSA Pharma

Cash and Equivalents Breakdown

Lets now check ESSA Pharma cash and equivalents. In accordance with the recently published financial statements, ESSA Pharma has 174.6 M in Cash and Equivalents. This is 78.73% lower than that of the Biotechnology sector and 60.95% lower than that of the Health Care industry. The cash and equivalents for all United States stocks is 93.54% higher than that of ESSA Pharma. As for Yum China we see cash and equivalents of 3.65 B, which is much higher than that of the Health Care

YUMC

3.6 B

EPIX	174.6 Million	4.09
Sector	447.12 Million	10.47
YUMC	3.65 Billion	85.45

Does ESSA Pharma have cash to continue?

ESSA Pharma current sortino ratio rises over 0.3. ESSA Pharma is displaying above-average volatility over the selected time horizon. Investors should scrutinize ESSA Pharma independently to ensure intended market timing strategies are aligned with expectations about ESSA Pharma volatility. Understanding different market volatility trends often help investors to time the market. Properly using volatility indicators enable traders to measure ESSA Pharma's stock risk against market volatility during both bullish and bearish trends. The higher level of volatility that comes with bear markets can directly impact ESSA Pharma's 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 Takeaway on ESSA Pharma Investment

While many other companies in the biotechnology industry are either recovering or due for a correction, ESSA Pharma may not be performing as strong as the other in terms of long-term growth potentials. While some investors may not share our view we believe that the current risk-reward utility is not appealing enough to do any trading. 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 ESSA Pharma.

Editorial Staff

Rifka Kats is a Member of Macroaxis Editorial Board. Rifka writes about retail product and service companies from the perspective of a regular consumer and sophisticated investor at the same time. She is passionate about corporate ethics and equality in the workforce. 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 Rifka Kats do not own shares of ESSA Pharma. Please refer to our Terms of Use for any information regarding our disclosure principles.

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