Party Stock Story

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PRTY
 Stock
  

USD 1.28  0.10  7.25%   

By Vlad Skutelnik
Macroaxis Story
While some planning is required to successfully invest in stocks, sometimes taking bold action is just as important. Let's try to break down why this may be the case with Party City. What exactly are Party City shareholders getting in June? Party City Holdco is at this time traded for 1.45. The entity has historical hype elasticity of 0.28. The average price elasticity to hype of competition is about -11.25. The firm is anticipated to increase in value after the next headline, with the price going to jump to 1.81. The current volatility of media hype impact on the company stock price is is way over 100 percent making price predictions on social media along less reliable. The price jump on the next news is projected to be 23.97%, whereas the daily expected return is at this time at -0.98%. The volatility of related hype on Party City is about 86.78% with expected price after next announcement by competition of -9.8 Given the investment horizon of 90 days the next anticipated press release will be in about 5 days.
Published over two months ago
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Will Party City (NYSE:PRTY) price continue sliding?

The asset utilization indicator refers to the revenue earned for every dollar of assets a company currently reports. Party City has an asset utilization ratio of 65.91 percent. This suggests that the company is making $0.66 for each dollar of assets. An increasing asset utilization means that Party City Holdco is more efficient with each dollar of assets it utilizes for everyday operations.
The successful prediction of Party City stock price could yield a significant profit to investors. But is it possible? The efficient-market hypothesis suggests that all published stock prices of traded companies, such as Party City Holdco, already reflect all publicly available information. This academic statement is a fundamental principle of many financial and investing theories used today. However, the typical investor usually disagrees with a 'textbook' version of this hypothesis and continually tries to find mispriced stocks to increase returns. We use internally-developed statistical techniques to arrive at the intrinsic value of Party City based on Party City hews, social hype, general headline patterns, and widely used predictive technical indicators.
We also calculate exposure to Party City's market risk, different technical and fundamental indicators, relevant financial multiples and ratios, and then comparing them to Party City's related companies.

Watch out for price decline

Please consider monitoring Party City on a daily basis if you are holding a position in it. Party City is trading at a penny-stock level, and the possibility of delisting is much higher compared to other equities. However, just because the stock is trading under one dollar, does not mean it will be marked for deletion. Most exchanges require public instruments, such as Party City stock to be traded above the $1 level to remain listed. If Party City stock price falls below $1 for 30 consecutive trading days, the exchange can delist it. Once the company reaches this point, they will be sent an initial price violation notice directly from an exchange.

Use Technical Analysis to project Party expected Price

Party City technical stock analysis exercises models and trading practices based on price and volume transformations, such as the moving averages, relative strength index, regressions, price and return correlations, business cycles, stock market cycles, or different charting patterns.
Overlap Analysis
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Forecast Models
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Price Shifting
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Volatility Indicators
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Value Movement
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A focus of Party City technical analysis is to determine if market prices reflect all relevant information impacting that market. A technical analyst looks at the history of Party City trading pattern rather than external drivers such as economic, fundamental, or social events. It is believed that price action tends to repeat itself due to investors' collective, patterned behavior. Hence technical analysis focuses on identifiable price trends and conditions. More Info...

How does Party utilize its cash?

To perform a cash flow analysis of Party City, investors first need to understand how to read the cash flow statement. A cash flow statement shows the amount of cash Party City is receiving and how much cash it distributes out in a given period. The Party City cash flow statement breaks down these inflows and outflows into different buckets, including operating activities, investing activities, and financing activities.
Party City Net Cash Flow from Operations is fairly stable at the moment as compared to the past year. Party City reported Net Cash Flow from Operations of 51.94 Million in 2021

Payment of 553 shares by De Mesa Graziano Cheryl of Party City subject to Rule 16b-3

Legal trades by Party City 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:
Party insider trading alert for payment of common stock par value $0.01 per share ("common stock") by De Mesa Graziano Cheryl, Chief Accounting Officer, on 29th of July 2022. This event was filed by Party City Holdco Inc with SEC on 2022-07-29. 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.

Detailed Perspective On Party City

The big decline in price over the last few months for Party City Holdcomay encourage investors to take a closer look at the company as it is trading at a share price of 1.45 on 3,241,205 in trading volume. The company executives failed to add value to investors and position the company supply of money to exploit market volatility in April. However, diversifying your holdings with Party City Holdco or similar stocks can still protect your portfolios during high-volatility market scenarios. The stock standard deviation of daily returns for 90 days investing horizon is currently 9.96. The very high volatility is mostly attributed to the latest market swings and not very good earnings reports from some of the Party City partners.

Will Party continue to rise?

The kurtosis is down to 21.74 as of today. Party City Holdco is displaying above-average volatility over the selected time horizon. Investors should scrutinize Party City Holdco independently to ensure intended market timing strategies are aligned with expectations about Party City volatility. Understanding different market volatility trends often help investors to time the market. Properly using volatility indicators enable traders to measure Party City'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 Party City'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.

Party City Implied Volatility

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

Our Final Takeaway

While few other entities in the specialty retail industry are either recovering or due for a correction, Party City may not be performing as strong as the other in terms of long-term growth potentials. The inconsistency in the assessment between current Party valuation and our trade advice on Party City is due to the recent market swings and your selection of investing horizon. 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 Party City.

Editorial Staff

Vlad Skutelnik is a Macroaxis Contributor. Vlad covers stocks, funds, cryptocurrencies, and ETFs that are traded in North America, focusing primarily on fundamentals, valuation and market volatility. He has many years of experience in fintech, predictive investment analytics, and risk management. 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 Vlad Skutelnik do not own shares of Party City Holdco. Please refer to our Terms of Use for any information regarding our disclosure principles.

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