Odyssey Story

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Given the investment horizon of 60 days, Odyssey Marine is expected to generate 2.69 times more return on investment than the market. However, the company is 2.69 times more volatile than its market benchmark. It trades about 0.1 of its potential returns per unit of risk. The DOW is currently generating roughly 0.14 per unit of risk. While many risk-averse investors are getting carried away by overanalyzing industrials space, it is reasonable to break down Odyssey Marine Exploration. We will go over odds for Odyssey Marine to generate above-average margins in two-three weeks.
Published over a month ago
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Will Odyssey Marine (NASDAQ:OMEX) current volatility spike continue?
This firm currently holds 37.41 M in liabilities with Debt to Equity (D/E) ratio of 6.34, indicating Odyssey Marine may have difficulties to generate enough cash to satisfy its financial obligations. The company has a current ratio of 0.03, indicating that it has a negative working capital and may not be able to pay financial obligations when due.

How important is Odyssey Marine's Liquidity

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

How Odyssey utilizes its cash?

To perform a cash flow analysis of Odyssey Marine, investors first need to understand how to read the cash flow statement. A cash flow statement shows the amount of cash Odyssey Marine is receiving and how much cash it distributes out in a given period. The Odyssey Marine cash flow statement breaks down these inflows and outflows into different buckets, including operating activities, investing activities, and financing activities. Odyssey Marine Net Cash Flow from Operations is fairly stable at the moment as compared to the past year. Odyssey Marine reported Net Cash Flow from Operations of (5.44 Million) in 2019

Odyssey Marine exotic insider transaction detected

Legal trades by Odyssey Marine 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:
Odyssey insider trading alert for general transaction of common stock by Mark Justh, the corporate stakeholder, on 1st of September 2020. This event was filed by Odyssey Marine Exploratio with SEC on 2020-09-01. 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.

Another Deeper Perspective

The current price rise of Odyssey Marine Explo may encourage investors to take a closer look at the company as it closed today at a share price of 5.18 on 61,300 in trading volume. The company management teams may have good odds in positioning the company resources to exploit market volatility in September. The stock standard deviation of daily returns for 30 days investing horizon is currently 4.01. This high volatility is attributed to the latest market swings and not so good earnings reports for some of the Odyssey Marine partners.
 2017 2018 2019 2020 (projected)
Interest Expense2.73 M3.14 M5.36 M4.48 M
Gross Profit1.25 M3.28 M3.07 M3.15 M

Anything left for Odyssey Marine after the slide?

The value at risk is down to -4.38 as of today. Odyssey Marine Exploration currently demonstrates below-verage downside deviation. It has Information Ratio of -0.04 and Jensen Alpha of 0.11. However, we do advice investors to further question Odyssey Marine Exploration expected returns to ensure all indicators are consistent with the current outlook about its relatively low value at risk.

The Current Takeaway on Odyssey Marine Investment

While many other companies in the specialty business services industry are either recovering or due for a correction, Odyssey Marine may not be performing as strong as the other in terms of long-term growth potentials. To sum up, as of the 15th of August 2020, we believe that Odyssey Marine is currently overvalued with very high chance of distress in the next two years. Our up-to-date 30 days buy-or-sell advice on the company is Strong Sell.

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 Odyssey Marine Exploration. Please refer to our Terms of Use for any information regarding our disclosure principles.

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