Pure Cycle Stock Story

PCYO

Stock

USD 11.14 0.29 2.67%

Macroaxis Story

As many millenniums are excited about utilities space, we are going to shadow both, Pure Cycle and United Util as a potential short-term opportunity. We are going to inspect some of the competitive aspects of both Pure Cycle and United.

Published over a month ago

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Is Pure Cycle riskier than United Util Plc (OTC:UUGWF)?

By analyzing existing basic indicators between Pure Cycle and United, 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 United with a short position in Pure Cycle. 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. Pure Cycle has an asset utilization ratio of 23.21 percent. This suggests that the company is making $0.23 for each dollar of assets. An increasing asset utilization means that Pure Cycle Corp is more efficient with each dollar of assets it utilizes for everyday operations.

Is Pure Cycle riskier than United Util Plc (OTC:UUGWF)?

How important is Pure Cycle's Liquidity

Pure Cycle financial leverage refers to using borrowed capital as a funding source to finance Pure Cycle Corp 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 does Pure Cycle utilize 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 3.36 Million

Acquisition by Abel Wanda J 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 Abel Wanda J, the corporate stakeholder, on 14th of January 2022. This event was filed by Pure Cycle Corp with SEC on 2022-01-14. 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.

Details

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 Pure Cycle revenue. Based on the latest financial disclosure, Pure Cycle Corp reported 16.45 M of revenue. This is 99.58% lower than that of the Utilities sector and significantly higher than that of the Utilities—Regulated Water industry. The revenue for all United States stocks is 99.83% higher than that of the firm. As for United Util we see revenue of 1.85 B, which is much higher than that of the Utilities—Regulated Water

UUGWF

1.9 B

PCYO	16.45 Million	0.88
Sector	0.0	0.0
UUGWF	1.85 Billion	99.12

Will Pure Cycle slide impact its fundamentals?

Pure Cycle latest standard deviation surges over 2.08. Pure Cycle Corp exhibits very low volatility with skewness of -1.58 and kurtosis of 4.6. However, we advise investors to further study Pure Cycle Corp technical indicators to make sure all market info is available and is reliable. Understanding different market volatility trends often help investors to time the market. Properly using volatility indicators enable traders to measure Pure Cycle's stock risk against market volatility during both bullying and bearish trends. The higher level of volatility that comes with bear markets can directly impact Pure Cycle's stock price while adding stress to investors as they watch their shares' value plummet. This usually forces investors to rebalance their portfolios by buying different stocks as prices fall.

Pure Cycle Implied Volatility

Pure Cycle's implied volatility exposes the market's sentiment of Pure Cycle Corp stock's possible movements over time. However, it does not forecast the overall direction of its price. In a nutshell, if Pure Cycle's implied volatility is high, the market thinks the stock has potential for high price swings in either direction. On the other hand, the low implied volatility suggests that Pure Cycle stock will not fluctuate a lot when Pure Cycle's options are near their expiration.

The Current Takeaway on Pure Cycle Investment

Whereas some firms in the utilities—regulated water industry are either recovering or due for a correction, Pure Cycle may not be performing as strong as the other in terms of long-term growth potentials. 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.

Editorial Staff

Raphi Shpitalnik is a Junior Member of Macroaxis Editorial Board. Raphael is a young entrepreneur who joined Macroaxis on a part-time base at the beginning of the pandemic and eventually acquired a real test for investing and fintech. He likes to analyze different equity instruments across a wide range of industries, focusing primarily on consumer products, sports, fintech, cannabis, and AI. 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 Raphi Shpitalnik do not own shares of Pure Cycle Corp. Please refer to our Terms of Use for any information regarding our disclosure principles.

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