Sotherly Story

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SOHO -- USA Stock  

USD 2.69  0.02  0.74%

The stock is still going through an active upward rally. As many baby boomers are still indifferent towards real estate space, it makes sense to outline Sotherly Hotels as a unique choice for millenniums. We will check if the company can maintain a respectable level of debt while minimizing operating losses.
Published over a month ago
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What is January outlook for Sotherly (NASDAQ:SOHO)?
This firm currently holds 374.12 M in liabilities with Debt to Equity (D/E) ratio of 6.59, indicating Sotherly Hotels may have difficulties to generate enough cash to satisfy its financial obligations. The company has a current ratio of 0.98, indicating that it has a negative working capital and may not be able to pay financial obligations when due. The company has Profit Margin (PM) of (37.91) %, which may suggest that it does not properly executes on its current pricing strategies or is unable to control all of the operational costs. This is way below average. Similarly, it shows Operating Margin (OM) of (18.34) %, which suggests for every $100 dollars of sales, it generated a net operating loss of -0.18.
Sotherly Hotels financial leverage ratio helps determine the effect of debt on the overall profitability of the company. It measures the total debt position of Sotherly Hotels, including all of Sotherly Hotels's outstanding debt obligations, and compares it with the equity. In simple terms, the high financial leverage means the cost of production, together with running the business day-to-day, is high, whereas, lower financial leverage implies lower fixed cost investment in the business and generally considered by investors to be a good sign. So if creditors own a majority of Sotherly Hotels assets, the company is considered highly leveraged. Understanding the composition and structure of overall Sotherly Hotels debt and outstanding corporate bonds gives a good idea of how risky the capital structure of a business is and if it is worth investing in it. Please read more on our technical analysis page.

How important is Sotherly Hotels's Liquidity

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

How Sotherly utilizes its cash?

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

Acquisition by Herschel Walker of 6769 shares of Sotherly Hotels subject to Rule 16b-3

Legal trades by Sotherly Hotels 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:
Sotherly insider trading alert for grant of common stock by Herschel Walker, the corporate stakeholder, on 21st of December 2020. This event was filed by Sotherly Hotels Inc with SEC on 2020-12-21. 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.

What is driving Sotherly Hotels Investor Appetite?

The latest price rise of Sotherly Hotels created some momentum for institutional investors as it was traded today as low as 2.31 and as high as 2.45 per share. The company directors and management may have good odds in positioning the company resources to exploit market volatility in January. The stock standard deviation of daily returns for 30 days investing horizon is currently 8.94. The very high volatility is mostly attributed to the latest market swings and not very good earnings reports from some of the Sotherly Hotels partners.

Are Sotherly Hotels technical ratios showing a correction?

The expected short fall is down to -4.97 as of today. Sotherly Hotels is displaying above-average volatility over the selected time horizon. Investors should scrutinize Sotherly Hotels independently to ensure intended market timing strategies are aligned with expectations about Sotherly Hotels volatility.

Our Final Take On Sotherly Hotels

Whereas some firms within the reit?hotel & motel industry are still a little expensive, even after the recent corrections, Sotherly Hotels may offer a potential longer-term growth to institutional investors. The inconsistency in the assessment between current Sotherly valuation and our trade advice on Sotherly Hotels 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 Sotherly Hotels.

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 Sotherly Hotels. Please refer to our Terms of Use for any information regarding our disclosure principles.

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