By analyzing existing forward indicators between Leslies and Lands, 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 Lands with a short position in Leslies. Check out our
pair correlation module for more information.
Let's begin by analyzing the assets. The concept of asset utilization usually refers to the revenue earned for every dollar of assets a company currently reports. The new return on assets of Leslies denotes not a very effective usage of assets in December.
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 LesliesInc or Genesco is a better fit for your portfolio, analyzing a few basic fundamental indicators is a good first step.
How important is LesliesInc's Liquidity
LesliesInc
financial leverage refers to using borrowed capital as a funding source to finance LesliesInc ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. LesliesInc 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 LesliesInc's 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 LesliesInc's 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 LesliesInc's total debt and its cash.
Correlation Between LesliesInc and Genesco
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 LesliesInc together with similar or unrelated positions with a negative correlation. For example, you can also add Genesco to your portfolio. If Genesco is not perfectly correlated to LesliesInc 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 LesliesInc, for example, performs excellent and delivers stable returns, the negatively correlated position you locked in as a hedge may drag your returns down.
Are you currently holding both LesliesInc and Genesco in your portfolio? Please note if you are using this as a pair-trade strategy between LesliesInc and Genesco, watch out for correlation discrepancy over time. Relying on the historical price correlations and assuming that it will not change may lead to short-term losses. Please check
pair correlation details between LESL and GCO for more information.
Another Deeper Perspective
Revenue is income that a firm generates from business activities such us rendering services or selling goods to customers. It is a crucial part of a business and an essential item when evaluating a company's financial statements. Revenues from a firm's primary business operations can be reported on the income statement as sales revenue, net sales, or simply sales, depending on the industry in which a given company operates.
Revenue is typically recorded when cash or cash equivalents are exchanged for services or goods and can include product or services discounts, promotions, as well as early payments on invoices or services rendered in advance.
Revenue Breakdown
Let me now analyze Leslies revenue. Based on the latest financial disclosure, Leslies reported 1.03
B of revenue. This is 85.55% lower than that of the Consumer Cyclical sector and significantly higher than that of the
Home Improvement Retail industry. The revenue for all United States stocks is 89.08% higher than that of the company. As for Lands End we see revenue of 1.44
B, which is much higher than that of the Home Improvement Retail
| Leslies | 1.03 Billion |
| Sector | 0.0 |
| Lands | 1.44 Billion |
Our take on today Leslies pull down
Semi deviation is down to 3.61. It may denote a possible volatility pull down. Leslies shows above-average downside volatility for the selected time horizon. We advise investors to inspect Leslies further and ensure that all market timing and asset allocation strategies are consistent with the estimation of Leslies future alpha.
The Bottom Line
While many of the other players within the home improvement retail industry are still a little expensive, even after the recent corrections, Leslies may offer a potential longer-term growth to stakeholders. While some stakeholders may not share our view we believe it may be a good time to exit Leslies as the risk-reward trade off is not 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 Leslies.
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Vlad Skutelnik is a Macroaxis Contributor. Vlad covers stocks, funds, cryptocurrencies, and ETFs that are traded in North America, focusing primarily on fundamentals, valuation and market volatility. He has many years of experience in fintech, predictive investment analytics, and risk management.
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 Vlad Skutelnik do not own shares of LesliesInc. Please refer to our
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