In the world of investing, the balance between risk and reward often dictates the choices investors make. Pet Acquisition LLC, a player in the specialty retail sector, has recently caught the attention of analysts and investors alike. With a market capitalization of approximately $799.9 million, the company has shown some promising financial metrics, including a total cash flow from operating activities of $215.7 million and an EBITDA of $201.6 million. However, it also faces challenges, such as a free cash flow loss of 9.9 million.
As investors weigh their options, comparing Pet Acquisition LLC to SunLink Health Systems (NASDAQ: SSY) becomes crucial. While Pet Acquisition boasts a revenue per share of $23.21 and an analyst consensus rating of "Buy," the potential for volatility remains. With a 50-day moving average of $3.09 and a Wall Street target price of $3.42, the question arises: is the allure of Pet Acquisition worth the risk compared to the more established SunLink Health Systems? SunLink Health is showing signs of a quicker recovery from its recent downturn, with its stock rising by 1.32%. In contrast, Pet Acquisition's shares increased by 2.73%. As enthusiasm grows among investors for the specialty retail sector, it seems that Pet Acquisition and SunLink Health are heading in different directions. In this analysis, we will explore the competitive dynamics between these two companies, shedding light on what sets them apart in the market.
Out of tens of thousands of stocks, funds, and ETFs that trade on global exchanges each represent an individual company which you can analyze using comparative analysis. To determine which one of the two entities, such as Pet or RH is a better fit for your portfolio, analyzing a few basic fundamental indicators is a good first step.
How important is Pet Acquisition's Liquidity
Pet Acquisition
financial leverage refers to using borrowed capital as a funding source to finance Pet Acquisition LLC ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. Pet Acquisition 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. Financial leverage can amplify the potential profits to Pet Acquisition's owners, but it also increases the potential losses and risk of financial distress, including bankruptcy, if the firm cannot cover its debt costs. The degree of Pet Acquisition's financial leverage can be measured in several ways, including by ratios such as the debt-to-equity ratio (total debt / total equity), equity multiplier (total assets / total equity), or the debt ratio (total debt / total assets). Please check the
breakdown between Pet Acquisition's total debt and its cash.
Correlation Between Pet and RH
In general, Stock analysis is a method for investors and traders to make individual buying and selling decisions. Stock correlation analysis is also essential because it can help investors realize that they may not be as diversified as they think. Risk management strategies are usually required to make sure all portfolios are properly aligned against their risk tolerance level. You can consider holding Pet Acquisition together with similar or unrelated positions with a negative correlation. For example, you can also add RH to your portfolio. If RH is not perfectly correlated to Pet Acquisition it will diversify some of the market risks out of the positively correlated stocks in your portfolio. However, the disadvantage of this sort of hedging is that it can potentially affect your investment returns throughout market cycles. When Pet Acquisition, for example, performs excellent and delivers stable returns, the negatively correlated position you locked in as a hedge may drag your returns down.
Are you currently holding both Pet Acquisition and RH in your portfolio? Please note if you are using this as a pair-trade strategy between Pet Acquisition and RH, watch out for correlation discrepancy over time. Relying on the historical price correlations and assuming that it will not change may lead to short-term losses. Please check
pair correlation details between WOOF and RH for more information.
A Deeper look at Pet
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 products or services discounts, promotions, as well as early payments on invoices or services rendered in advance.
Revenue Breakdown
Lets now take a look at Pet Acquisition revenue. Based on the latest financial disclosure, Pet Acquisition LLC reported 6.26
B of revenue. This is 12.27% lower than that of the Specialty Retail sector and 55.76% lower than that of the
Consumer Discretionary industry.
The revenue for all United States stocks is 33.7% higher than that of Pet Acquisition. As for SunLink Health we see revenue of 47.95
M, which is 99.66% lower than that of the Consumer Discretionary
| Pet | 6.26 Billion |
| Sector | 7.13 Billion |
| SunLink | 47.95 Million |
"Risk comes from not knowing what you're doing." - Warren Buffett. When comparing Pet Acquisition LLC to SunLink Health Systems (NASDAQ: SSY), investors should be cautious. Pet Acquisition has a current ratio of 0.98X, indicating it may struggle to cover short-term liabilities, while its operating margin is slightly negative, reflecting operational challenges. The company also faces a high probability of bankruptcy at 43.06%, which raises red flags for potential investors. In contrast, SunLink's financial health appears more stable, making it a potentially safer bet in the specialty retail sector. With a market capitalization of $799.87 million and a price-to-earnings ratio of 23.44X, Pet Acquisition's stock may present a riskier investment opportunity compared to its competitor..
Analysis of Pet Acquisition LLC
Recent data indicates that Pet Acquisition LLC's Total Risk Alpha has dropped to -0.91, which may hint at a possible decline in the stock's price. This change in risk metrics suggests that investors are becoming more cautious, raising concerns about the company's future. With market sentiment turning negative, current and potential investors should keep a close eye on developments and reassess their strategies. As of September 10th, Pet Acquisition has a Coefficient of Variation of 1,347, a variance of 30.71, and a Risk Adjusted Performance of 0.05. For a deeper understanding, investors can explore the company's technical indicators and performance metrics to determine if the current share price of $2.85 accurately reflects its value. Additionally, the Jensen Alpha stands at -0.63, prompting further evaluation of the company's sustainability.
Our Final Perspective on Pet Acquisition
While some other entities in the specialty retail industry are either recovering or due for a correction, Pet Acquisition may not be performing as strong as the other in terms of long-term growth potentials. With a relatively neutral outlook on the current economy, it is better to hold off any trading of Pet as the current risk-reward utility is not appealing enough. 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 Pet Acquisition.
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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 Pet Acquisition LLC. Please refer to our
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