Party Stock Story

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PRTY
 Stock
  

USD 2.07  0.09  4.55%   

By Vlad Skutelnik
Macroaxis Story
Lets try to break down the odds of Party City to fully recover from the current slide as its shares went up 8.55%. The entity current daily volatility is 9.81 percent, with a beta of 3.61 and an alpha of -0.51 over DOW. While many traders are getting carried away by overanalyzing current market swings, it is reasonable to break down Party City Holdco. What exactly are Party City shareholders getting in July?
Published over two months ago
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Should you trade Party City Holdco after the current volatility slide?

Party City Holdco conducts business under Consumer Cyclical sector and is part of Specialty Retail industry.
We provide trade recommendations to complement the recent expert consensus on Party City Holdco. Our dynamic recommendation engine exercises a multidimensional algorithm to analyze the firm's potential to grow using all technical and fundamental data available at the time.
Investing in Party City, 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 Party City 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 Party City'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 Party City in the context of predictive analytics.
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Please note, it is not enough to conduct a financial or market analysis of a single entity such as Party City. Your research has to be compared to or analyzed against Party City's peers to derive any actionable benefits. When done correctly, Party City'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 Party City Holdco.

How important is Party City's Liquidity

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

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

Party City Correlation with Peers

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

Payment of 1444 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 11th of August 2022. This event was filed by Party City Holdco Inc with SEC on 2022-08-11. 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

Party City Holdco maintains Sharpe Ratio (i.e., Efficiency) of -0.0938, which implies the firm had -0.0938% 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. Party City Holdco exposes twenty-seven different technical indicators, which can help you to evaluate volatility that cannot be diversified away. Please be advised to check Party City Holdco coefficient of variation of (1,014), and Risk Adjusted Performance of (0.13) to confirm the risk estimate we provide.
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0.630.340.820.48
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0.820.410.330.54
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0.48-0.22-0.470.54
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Click cells to compare fundamentals   Check Volatility   Backtest Portfolio

Will Party City growth be reasonable after the rise?

Current Information Ratio is up to -0.09. Price may slide again. 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 Take On Party City

While few other entities in the specialty retail industry are either recovering or due for a correction, Party may not be as strong as the others in terms of longer-term growth potentials. To conclude, as of the 15th of June 2022, our overall 90 days buy-hold-sell advice on the company is Strong Sell. However, we believe Party City is undervalued with average chance of financial distress for the next two years.

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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