Genesco Stock Story

GCO -  USA Stock  

USD 61.09  1.27  2.04%

It seems Genesco will continue to recover much faster as its share price surged up 4.12% today. The entity current daily volatility is 3.21 percent, with a beta of 1.69 and an alpha of 0.15 over DOW. As many of us are excited about stable market, it is fair to outline Genesco. We will evaluate if Genesco shares are reasonably priced going into January.
Published over a month ago
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How risky is Genesco after the latest volatility rise?
Genesco has roughly 258.04 M in cash with 229.71 M of positive cash flow from operations. This results in cash-per-share (CPS) ratio of 17.25.
Macroaxis provides unbiased trade recommendations on Genesco that should be used to complement current analysts and expert consensus on Genesco. Our advice engine determines the entity's potential to grow exclusively from the perspective of an investors' current risk tolerance and investing horizon.
Investing in Genesco, 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 Genesco 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 Genesco's 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 Genesco 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 Genesco. Your research has to be compared to or analyzed against Genesco's peers to derive any actionable benefits. When done correctly, Genesco's 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 Genesco.

How important is Genesco's Liquidity

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

How does Genesco utilize its cash?

To perform a cash flow analysis of Genesco, investors first need to understand how to read the cash flow statement. A cash flow statement shows the amount of cash Genesco is receiving and how much cash it distributes out in a given period. The Genesco cash flow statement breaks down these inflows and outflows into different buckets, including operating activities, investing activities, and financing activities.
Genesco 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 188.93 Million

Genesco Correlation with Peers

Investors in Genesco can reduce exposure to individual asset risk by holding a diversified portfolio of assets in addition to a long position in Genesco. Diversification will allow for the same portfolio return with reduced risk. The correlation table of Genesco and its peers is a two-dimensional matrix that shows the correlation coefficient between pairs of securities Genesco 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 Genesco for more details

Acquisition by Thomas George of 24936 shares of Genesco subject to Rule 16b-3

Legal trades by Genesco 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:
Genesco insider trading alert for grant of common stock by Thomas George, Sr VP-Finance and CFO, on 22nd of October 2021. This event was filed by Genesco Inc with SEC on 2021-10-22. Statement of changes in beneficial ownership - SEC Form 4. Thomas George currently serves as interim chief financial officer, senior vice president - finance of Genesco [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.

Is Genesco valued adequately by the market?

Genesco appears to be very steady, given 3 months investment horizon. Genesco holds Efficiency (Sharpe) Ratio of 0.0838, which attests that the entity had 0.0838% of return per unit of risk over the last 3 months. Our standpoint towards determining the volatility of a stock is to use all available market data together with stock-specific technical indicators that cannot be diversified away. We have found twenty-eight technical indicators for Genesco, which you can use to evaluate the future volatility of the firm. Please utilize Genesco's Market Risk Adjusted Performance of 0.0606, risk adjusted performance of 0.0314, and Downside Deviation of 3.39 to validate if our risk estimates are consistent with your expectations.

Can Genesco build up on the latest rise?

The total risk alpha is down to 0.24 as of today. Genesco shows above-average downside volatility for the selected time horizon. We advise investors to inspect Genesco further and ensure that all market timing and asset allocation strategies are consistent with the estimation of Genesco future alpha. Understanding different market volatility trends often help investors to time the market. Properly using volatility indicators enable traders to measure Genesco's stock risk against market volatility during both bullying and bearish trends. The higher level of volatility that comes with bear markets can directly impact Genesco'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.

Genesco Implied Volatility

Genesco's implied volatility exposes the market's sentiment of Genesco stock's possible movements over time. However, it does not forecast the overall direction of its price. In a nutshell, if Genesco's implied volatility is high, the market thinks the stock has potential for high price swings in either direction. On the other hand, the low implied volatility suggests that Genesco stock will not fluctuate a lot when Genesco's options are near their expiration.

The Bottom Line

Whereas some other entities within the apparel retail industry are still a little expensive, even after the recent corrections, Genesco may offer a potential longer-term growth to institutional investors. To conclude, as of the 3rd of December 2021, our ongoing 90 days Buy-Hold-Sell recommendation on the company is Hold. We believe Genesco is currently fairly valued with below average odds of distress for the next two years.

Editorial Staff

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

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