Should you drop your Asahi Kaisei (USA Stocks:AHKSY) and Mesa Air (USA Stocks:MESA) positions after a build-up?

MESA Stock

USD 3.21 0.04 1.26%

Macroaxis Story

Today we may see the proof that Asahi Kaisei would recover much slower from the current slide as its shares went up 0.07% to Mesa Air's 3.55%. As many rational traders are trying to avoid airlines space, it makes sense to go over Mesa Air Group a little further and understand how it stands against Asahi Kaisei and other similar entities. We are going to analyze some of the competitive aspects of both Mesa Air and Asahi.

Published over a month ago

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By analyzing existing basic indicators between Mesa Air and Asahi, 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 Asahi with a short position in Mesa Air. Check out our pair correlation module for more information.

Let's begin by analyzing the assets.

The asset utilization indicator refers to the revenue earned for every dollar of assets a company currently reports. Mesa Air has an asset utilization ratio of 34.57 percent. This suggests that the company is making $0.35 for each dollar of assets. An increasing asset utilization means that Mesa Air Group is more efficient with each dollar of assets it utilizes for everyday operations.

Should you drop your Asahi Kaisei (USA Stocks:AHKSY) and Mesa Air (USA Stocks:MESA) positions after a build-up?

How important is Mesa Air's Liquidity

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

How does Mesa Air utilize its cash?

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

Mesa Air Net Cash Flow from Operations is projected to increase significantly based on the last few years of reporting. The past year's Net Cash Flow from Operations was at 119.58 Million

Mesa Air exotic insider transaction detected

Legal trades by Mesa Air 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:

Mesa Air insider trading alert for general transaction of restricted stock units by Spyridon Skiados, the corporate stakeholder, on 6th of January 2023. This event was filed by Mesa Air Group Inc with SEC on 2018-08-09. Initial filing of beneficial ownership - SEC Form 3 [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.

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 Mesa Air revenue. Based on the latest financial disclosure, Mesa Air Group reported 503.59 M of revenue. This is 85.61% lower than that of the Airlines sector and 96.74% lower than that of the Industrials industry. The revenue for all United States stocks is 94.66% higher than that of Mesa Air Group. As for Asahi Kaisei we see revenue of 2461.32 B, which is much higher than that of the Industrials

AHKSY

2461.3 B

MESA	503.59 Million	0.0204
Sector	3.5 Billion	0.14
AHKSY	2.46 Trillion	99.84

Our perspective of the current Mesa Air rise

Current total risk alpha indicator falls down to -0.87. Possible price jump?

As of the 11th of December 2022, Mesa Air secures the mean deviation of 3.43, and Risk Adjusted Performance of (0.19). In connection with fundamental indicators, the technical analysis model lets you check existing technical drivers of Mesa Air Group, as well as the relationship between them. Strictly speaking, you can use this information to find out if the firm will indeed mirror its model of past prices, or the prices will eventually revert. We are able to interpolate and collect nineteen technical drivers for Mesa Air, which can be compared to its peers in the industry. Please verify Mesa Air Group maximum drawdown, as well as the relationship between the downside variance and skewness to decide if Mesa Air Group is priced some-what accurately, providing market reflects its recent price of 1.46 per share. Please also check out Mesa Air total risk alpha, which is currently at (0.87) to check the company can sustain itself at a future point.

Our Final Take On Mesa Air

Whereas some firms in the airlines industry are either recovering or due for a correction, Mesa Air may not be as strong as the others in terms of longer-term growth potentials. All things considered, as of the 11th of December 2022, our up-to-date 90 days 'Buy-vs-Sell' recommendation on the company is Cautious Hold. We believe Mesa Air is undervalued with low probability of distress for the next two years.

Editorial Staff

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 Mesa Air Group. Please refer to our Terms of Use for any information regarding our disclosure principles.

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