HC2 Holdings Story

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HCHC -- USA Stock  

USD 3.49  0.06  1.69%

The next fiscal quarter end is expected on the 31st of December 2020. The stock is undergoing an active upward rally. HC2 Holdings Revenue Per Employee is projected to increase significantly based on the last few years of reporting. The past year's Revenue Per Employee was at 31 Million. The current year Average Assets is expected to grow to about 7.4 B, whereas Net Income Per Employee is forecasted to decline to (505.1 K). As many investors are getting excited about communication services space, it is fair to go over HC2 Holdings as an investment option. I will address a few possible reasons investors do not currently respect this stock.
Published over three weeks ago
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Will HC2 Holdings (NYSE:HCHC) debt increase in January
HC2 Holdings currently holds 646.4 M in liabilities with Debt to Equity (D/E) ratio of 1.48, which is about average as compared to similar companies. The entity has a current ratio of 4.66, suggesting that it is liquid enough and is able to pay its financial obligations when due.
HC2 Holdings financial leverage ratio helps determine the effect of debt on the overall profitability of the company. It measures the total debt position of HC2 Holdings, including all of HC2 Holdings's outstanding debt obligations, and compares it with the equity. In simple terms, the high financial leverage means the cost of production, together with running the business day-to-day, is high, whereas, lower financial leverage implies lower fixed cost investment in the business and generally considered by investors to be a good sign. So if creditors own a majority of HC2 Holdings assets, the company is considered highly leveraged. Understanding the composition and structure of overall HC2 Holdings debt and outstanding corporate bonds gives a good idea of how risky the capital structure of a business is and if it is worth investing in it. Please read more on our technical analysis page.

Understanding HC2 Holdings Total Debt

HC2 Holdings liabilities are broken down into two parts on the balance sheet. These are short-term (or current) obligations and long-term debt. HC2 Holdings has to fulfill its short-term liabilities in this reporting year and should be no more than 12 months old. Long-term debt, on the other hand, is anything beyond the 12-month payment timeframe. Common short-term liabilities found on HC2 Holdings balance sheet include debt obligations and money owed to different HC2 Holdings vendors, workers, and loan providers. Below is the chart of HC2 Holdings main long-term debt accounts currently reported on its balance sheet.
You can use HC2 Holdings financial leverage analysis tool to get a better grip on understanding its financial position

How important is HC2 Holdings's Liquidity

HC2 Holdings financial leverage refers to using borrowed capital as a funding source to finance HC2 Holdings ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. HC2 Holdings 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 HC2 Holdings's total debt and its cash.

Exercise of in-the-money or at-the-money derivative position by Gorzynski Michael of 2814137 shares of HC2 Holdings

Legal trades by HC2 Holdings 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:
HC2 Holdings insider trading alert for exercise of subscription rights (right to buy) by Gorzynski Michael, the corporate stakeholder, on 8th of December 2020. This event was filed by Hc2 Holdings Inc with SEC on 2020-12-08. 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.

What is the case for HC2 Holdings Investors

The current price rise of HC2 Holdings may raise some interest from investors. The stock closed today at a share price of 3.68 on 1,872,400 in trading volume. The company directors and management may have good odds in positioning the entity resources to exploit market volatility in January. The stock standard deviation of daily returns for 30 days investing horizon is currently 4.48. This high volatility is attributed to the latest market swings and not so good earnings reports for some of the HC2 Holdings partners.

Liabilities Breakdown

Total Liabilities7.01 Billion
Current Liabilities189.7 Million
Long-Term Liabilities266.95 Million
Tax Liabilities472,926

Will HC2 Holdings growth be trustworthy after the rise?

Treynor ratio is down to 0.57. It may suggest a possible volatility slip. HC2 Holdings shows above-average downside volatility for the selected time horizon. We advise investors to inspect HC2 Holdings further and ensure that all market timing and asset allocation strategies are consistent with the estimation of HC2 Holdings future alpha.

Our Final Takeaway

Whereas some other firms under the telecom services industry are still a bit expensive, HC2 Holdings may offer a potential longer-term growth to investors. While some investors may not share our view, we believe it may be a good time to increase your existing holdings in HC2 Holdings as the risk-reward trade off is appealing enough to hold a position. 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 HC2 Holdings.

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 Raphi Shpitalnik do not own shares of HC2 Holdings. Please refer to our Terms of Use for any information regarding our disclosure principles.

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