Madison Story

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MSGE -- USA Stock  

USD 68.48  1.03  1.48%

It looks as if Madison Square may not recover as fast as we have hopped for as its price went down 1.78% today. The company's current daily volatility is 157.13 percent, with a beta of -19.42 and an alpha of 42.34 over DOW. While many traders are getting carried away by overanalyzing market volatility, it is reasonable to digest Madison Square Garden based on how it reacts to the latest economic swings. We will analyze why it could be a much better year for Madison Square shareholders.
Published over a month ago
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Is Madison Square (NYSE:MSGE) way too risky for millennials?
Madison Square Garden currently holds about 1.33 B in cash with 183.71 M of positive cash flow from operations. This results in cash-per-share (CPS) ratio of 55.58. Madison Square currently holds 281.02 M in liabilities with Debt to Equity (D/E) ratio of 0.1, which may suggest the company is not taking enough advantage from borrowing. This firm has a current ratio of 2.59, suggesting that it is liquid enough and is able to pay its financial obligations when due.
Investing in Madison Square, 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 Madison Square 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.

How important is Madison Square's Liquidity

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

How Madison utilizes its cash?

To perform a cash flow analysis of Madison Square, investors first need to understand how to read the cash flow statement. A cash flow statement shows the amount of cash Madison Square is receiving and how much cash it distributes out in a given period. The Madison Square cash flow statement breaks down these inflows and outflows into different buckets, including operating activities, investing activities, and financing activities. Madison Square 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 96.03 Million

Madison Square Correlation with Peers

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

Another Deeper Perspective

Madison Square is out of control given 1 month investment horizon. Madison Square Garden has Sharpe Ratio of 0.16, which conveys that the firm had 0.16% of return per unit of risk over the last month. Our standpoint towards estimating the volatility of a stock is to use Madison Square Garden market data together with company specific technical indicators. We are able to interpolate and collect twenty-eight different technical indicators, which can help you to evaluate if expected returns of 25.1% are justified by taking the suggested risk. Use Madison Square Garden Mean Deviation of 76.48, risk adjusted performance of 0.3254, and Downside Deviation of 21.95 to evaluate company specific risk that cannot be diversified away.
Click cells to compare fundamentals   Check Volatility   Backtest Portfolio

Another small dip for Madison Square

Potential upside is down to 6.61. It may indicate a possible volatility dip. As of the 14th of August 2020, Madison Square secures the Downside Deviation of 21.95, risk adjusted performance of 0.3254, and Mean Deviation of 76.48. In connection with fundamental indicators, the technical analysis model lets you check existing technical drivers of Madison Square Garden, 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 Madison Square, which can be compared to its peers in the industry. Please verify Madison Square Garden treynor ratio, and the relationship between the standard deviation and downside variance to decide if Madison Square Garden is priced some-what accurately, providing market reflects its recent price of 71.36 per share. Given that Madison Square Garden has jensen alpha of 42.34, we recommend you to check Madison Square's last-minute market performance to make sure the company can sustain itself at a future point.

The Bottom Line

Although many of the other players in the entertainment industry are either recovering or due for a correction, Madison may not be as strong as the others in terms of longer-term growth potentials. Taking everything into account, as of the 14th of August 2020, our concluding 30 days buy vs. sell advice on the firm is Cautious Hold. We believe Madison Square is currently undervalued with low chance of financial distress for the next two years.

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 Madison Square Garden. Please refer to our Terms of Use for any information regarding our disclosure principles.

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