Pure Cycle Story

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Pure Cycle Enterprise Value is quite stable at the moment as compared to the past year. The company's current Enterprise Value is estimated at 315.99 Million. Invested Capital is expected to rise to about 70 M this year, although the value of Average Equity will most likely fall to about 77.9 M. While some of us are becoming more passionate about utilities space, it makes sense to outline Pure Cycle in greater detail. We will evaluate why recent Pure Cycle price moves suggest a bounce in February. Here I will also expose some primary fundamental factors affecting Pure Cycle's services, and outline how it will impact the outlook for investors this year.
Published over three weeks ago
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Another strong showing for Pure Cycle
This firm reported the previous year's revenue of 25.86 M. Net Income was 6.75 M with profit before overhead, payroll, taxes, and interest of 8.91 M.

How important is Pure Cycle's Liquidity

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

How Pure Cycle utilizes its cash?

To perform a cash flow analysis of Pure Cycle, investors first need to understand how to read the cash flow statement. A cash flow statement shows the amount of cash Pure Cycle is receiving and how much cash it distributes out in a given period. The Pure Cycle cash flow statement breaks down these inflows and outflows into different buckets, including operating activities, investing activities, and financing activities. Pure Cycle Net Cash Flow from Operations is quite stable at the moment as compared to the past year. The company's current value of Net Cash Flow from Operations is estimated at 20.12 Million

Acquisition by Fendel Frederick A Iii of 2000 shares of Pure Cycle subject to Rule 16b-3

Legal trades by Pure Cycle 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:
Pure Cycle insider trading alert for grant of common stock by Fendel Frederick A Iii, the corporate stakeholder, on 22nd of January 2021. This event was filed by Pure Cycle Corp with SEC on 2021-01-22. 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.

Breaking down Pure Cycle Indicators

Pure Cycle has a total of 23.87 Million outstanding shares. The majority of Pure Cycle outstanding shares are owned by third-party entities. These institutional holders are usually referred to as non-private investors looking to secure positions in Pure Cycle to benefit from reduced commissions. Consequently, institutional investors are subject to a different set of regulations than regular investors in Pure Cycle. Please pay attention to any change in the institutional holdings of Pure Cycle as this could imply that something significant has changed or about to change at the company. Note that regardless of who owns the company, if the true value of the entity is less than the market is willing to pay for it, you may not be able to generate positive returns over time.

Ownership Breakdown

Retail Investors
26.28%
Institutions
70.05%
Retail Investors26.28
Insiders3.67
Institutions70.05

Our perspective of the latest Pure Cycle rise

Latest downside variance is at 6.4. Pure Cycle currently demonstrates below-verage downside deviation. It has Information Ratio of 0.1 and Jensen Alpha of 0.35. However, we do advice investors to further question Pure Cycle expected returns to ensure all indicators are consistent with the current outlook about its relatively low value at risk.

Our Takeaway on Pure Cycle Investment

Whereas some firms under the utilities?regulated water industry are still a bit expensive, Pure Cycle may offer a potential longer-term growth to institutional investors. While some institutional investors may not share our view we believe that the current risk-reward utility is not appealing enough to do any trading. 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 Pure Cycle.

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 Pure Cycle. Please refer to our Terms of Use for any information regarding our disclosure principles.

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