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Will the current Imedia Brands volatility rise frighten stockholders?
 | By Ellen Johnson | Macroaxis Story |
It seems as Imedia Brands will continue to recover much faster as its share price surged up 11.93% today. The entity's current daily volatility is 7.32 percent, with a beta of -0.21 and an alpha of 1.86 over DOW. As many baby boomers are still indifferent towards stable market, it makes sense to concentrate on Imedia Brands. We will evaluate why recent Imedia Brands price moves suggest a bounce in September.
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Reviewed by Michael Smolkin
Imedia Brands currently holds roughly 16.2 M in cash with 5.51 M of positive cash flow from operations. This results in cash-per-share (CPS) ratio of 1.71. The company currently holds 59.32 M in liabilities with Debt to Equity (D/E) ratio of 4.27, indicating the firm may have difficulties to generate enough cash to satisfy its financial obligations. Imedia Brands has a current ratio of 1.15, suggesting that it may not be capable to disburse its financial obligations when due.
Please note, it is not enough to conduct a financial or market analysis of a single entity such as IMedia Brands. Your research has to be compared to or analyzed against IMedia Brands' peers to derive any actionable benefits. When done correctly, IMedia Brands' competitive analysis will give you plenty of quantitative and qualitative data to validate your investment decisions or develop an entirely new strategy toward taking a position in IMedia Brands.
Investing in IMedia Brands, 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 IMedia Brands 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, anticipate that the market will even out over time. This tendency of IMedia Brands' 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.
Watch out for price decline
Please consider monitoring IMedia Brands on a daily basis if you are holding a position in it. IMedia Brands is trading at a penny-stock level, and the possibility of delisting is much higher compared to other delisted stocks. However, just because the stock is trading under one dollar, does not mean it will be marked for deletion. Most exchanges require public instruments, such as IMedia Brands stock to be traded above the $1 level to remain listed. If IMedia Brands stock price falls below $1 for 30 consecutive trading days, the exchange can delist it. Once the company reaches this point, they will be sent an initial price violation notice directly from an exchange.
How important is IMedia Brands's Liquidity
IMedia Brands financial leverage refers to using borrowed capital as a funding source to finance IMedia Brands ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. IMedia Brands 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. Financial leverage can amplify the potential profits to IMedia Brands' owners, but it also increases the potential losses and risk of financial distress, including bankruptcy, if the firm cannot cover its debt costs. The degree of IMedia Brands' financial leverage can be measured in several ways, including by ratios such as the debt-to-equity ratio (total debt / total equity), equity multiplier (total assets / total equity), or the debt ratio (total debt / total assets). Please check the breakdown between IMedia Brands's total debt and its cash.
IMedia Brands Correlation with Peers
Investors in IMedia can reduce exposure to individual asset risk by holding a diversified portfolio of assets in addition to a long position in IMedia Brands. Diversification will allow for the same portfolio return with reduced risk. The correlation table of IMedia Brands and its peers is a two-dimensional matrix that shows the correlation coefficient between pairs of securities IMedia 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 IMedia for more details
Breaking down IMedia Brands Further
Imedia Brands is risky given 1 month investment horizon. Imedia Brands holds Efficiency (Sharpe) Ratio of 0.24, which attests that the entity had 0.24% of return per unit of risk over the last month. Our standpoint towards determining the risk of a stock is to use both market data as well as company specific technical data. We were able to collect and analyze data for twenty-eight different technical indicators, which can help you to evaluate if expected returns of 1.75% are justified by taking the suggested risk. Use Imedia Brands Market Risk Adjusted Performance of (8.85), downside deviation of 5.83, and Risk Adjusted Performance of 0.389 to evaluate company specific risk that cannot be diversified away.
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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 Ellen Johnson do not own shares of IMedia Brands. Please refer to our Terms of Use for any information regarding our disclosure principles.