How risky is Primo Water Corp after the latest volatility climb?

PRMW
 Stock
  

USD 12.65  0.38  2.92%   

Lets try to focus on the odds of Primo Water to fully recover from the latest fall as its shares went up 6.24%. The entity current daily volatility is 1.84 percent, with a beta of 0.99 and an alpha of -0.15 over DOW. While some baby boomers are getting worried about primo water corp, it is reasonable to focus on Primo Water Corp. We will analyze why Primo Water investors may still consider a stake in the business.
Published over a month ago
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Primo Water Corp currently holds roughly 98 M in cash with 251 M of positive cash flow from operations. This results in cash-per-share (CPS) ratio of 0.61.
Our trade recommendations tool can cross-verify current analyst consensus on Primo Water Corp and to analyze the firm potential to grow in the current economic cycle.
Investing in Primo Water, 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 Primo Water 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.
Sophisticated investors, who have witnessed many market ups and downs, frequently view the market will even out over time. This tendency of Primo Water's price to converge to an average value over time is called mean reversion. However, historically, high market prices usually discourage investors that believe in mean reversion to invest, while low prices are viewed as an opportunity to buy. Please use the tools below to analyze the current value of Primo Water in the context of predictive analytics.
Please note, it is not enough to conduct a financial or market analysis of a single entity such as Primo Water. Your research has to be compared to or analyzed against Primo Water's peers to derive any actionable benefits. When done correctly, Primo Water's competitive analysis will give you plenty of quantitative and qualitative data to validate your investment decisions or develop an entirely new strategy towards taking a position in Primo Water Corp.

How important is Primo Water's Liquidity

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

How does Primo utilize its cash?

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

Primo Water Correlation with Peers

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

Breaking it down

Primo Water Corp maintains Sharpe Ratio (i.e., Efficiency) of -0.0648, which implies the firm had -0.0648% of return per unit of risk over the last 3 months. Macroaxis standpoint towards forecasting the risk of any stock is to look at both systematic and unsystematic factors of the business, including all available market data and technical indicators. Primo Water Corp exposes twenty-seven different technical indicators, which can help you to evaluate volatility that cannot be diversified away. Please be advised to check Primo Water Corp risk adjusted performance of (0.08), and Coefficient Of Variation of (1,462) to confirm the risk estimate we provide.
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0.820.240.24
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0.820.170.64
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0.240.170.02
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0.240.640.02
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Click cells to compare fundamentals   Check Volatility   Backtest Portfolio

Will Primo Water growth be rational after the climb?

Primo Water latest mean deviation rises over 1.32. Primo Water Corp exhibits very low volatility with skewness of 0.07 and kurtosis of 1.99. However, we advise investors to further study Primo Water 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 Primo Water'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 Primo Water'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.

Primo Water Implied Volatility

Primo Water's implied volatility exposes the market's sentiment of Primo Water Corp stock's possible movements over time. However, it does not forecast the overall direction of its price. In a nutshell, if Primo Water'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 Primo Water stock will not fluctuate a lot when Primo Water's options are near their expiration.

Our Bottom Line On Primo Water Corp

While some firms in the beverages—non-alcoholic industry are either recovering or due for a correction, Primo may not be as strong as the others in terms of longer-term growth potentials. To sum up, as of the 11th of August 2022, we believe that at this point, Primo Water is undervalued with very low chance of distress within the next 2 years. Our actual buy-hold-sell recommendation on the venture is Buy.

Editorial Staff

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 Primo Water Corp. Please refer to our Terms of Use for any information regarding our disclosure principles.

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