Should you pick up more of Studio based on current volatility?

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44% of stocks are less volatile than Studio, and above 99% of all equities are expected to generate higher returns over the next 60 days. As many conservative investors are still indifferent towards current market risk, it is prudent, from our point of view, to go over Studio City's current volatility. We will cover the possibilities of Studio City's current volatility to continue through August.

Published over a year ago

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Reviewed by Raphi Shpitalnik

Studio City International has roughly 256.06 M in cash with 139.52 M of positive cash flow from operations. This results in cash-per-share (CPS) ratio of 3.26. The entity has a beta of 0.4674, which indicates possible diversification benefits within a given portfolio. Let's try to break down what Studio's beta means in this case. As returns on the market increase, Studio City returns are expected to increase less than the market. However, during the bear market, the loss on holding Studio City will be expected to be smaller as well. Even though it is essential to pay attention to Studio City Internat current price movements, it is always good to be careful when utilizing equity historical returns. Our philosophy towards measuring any stock's future performance is to check both, its past performance charts as well as the business as a whole, including all available technical indicators. Studio City International exposes twenty-one different technical indicators, which can help you to evaluate its performance. Studio City Internat has an expected return of -0.2566%. Please be advised to validate Studio City jensen alpha, potential upside, as well as the relationship between the Potential Upside and skewness to decide if Studio City Internat stock performance from the past will be repeated at some point in the near future.

Should you pick up more of Studio based on current volatility?

Volatility is a rate at which the price of Studio City or any other equity instrument increases or decreases for a given set of returns. It is measured by calculating the standard deviation of the annualized returns over a given period of time and shows the range to which the price of Studio City may increase or decrease. In other words, similar to Studio's beta indicator, it measures the risk of Studio City and helps estimate the fluctuations that may happen in a short period of time. So if prices of Studio City fluctuate rapidly in a short time span, it is termed to have high volatility, and if it swings slowly in a more extended period, it is understood to have low volatility. Please read more on our technical analysis page.

How important is Studio City's Liquidity

Studio City financial leverage refers to using borrowed capital as a funding source to finance Studio City International ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. Studio 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. Financial leverage can amplify the potential profits to Studio City'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 Studio City'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 Studio City's total debt and its cash.

Studio City Gross Profit

Studio City Gross Profit growth is one of the most critical measures in evaluating the company. The Gross Profit growth rate is calculated simply by comparing Studio City previous period's values with its current period's values. Each time period you're measuring should be of equal lengths the increase or decrease, in a company's Gross Profit between two periods. Here we show Studio City Gross Profit growth over the last 10 years. Please check Studio City's gross profit and other fundamental indicators for more details.

Studio City Volatility Drivers

Studio City unsystematic risk is unique to Studio City International and usually not directly affected by the market or economic environment. An example of unsystematic risk is the possibility of poor earnings or a layoff due to coronavirus. One may mitigate nonsystematic risk by buying different securities in the same industry or by buying in different sectors. For example, if you have a position in Studio City you can also buy Golden Entertainment. You can also mitigate this risk by investing in the consumer discretionary sector as well as in companies having nothing to do with it. This type of risk is also called diversifiable risk and can be understood from analyzing Studio City important indicators over time. Here we run a correlation analysis between relevant fundamental ratios over at least ten year period to find a relationship in the way they react to changes in Studio City income statement and balance sheet. Here are more details about Studio volatility.

	Total Assets	Net Debt	Total Liab	Common Stock	Capital Stock	Total Revenue	Gross Profit	Net Income	Tax Provision	Ptb Ratio	Pb Ratio	Ev To Sales	Pfcf Ratio	Pe Ratio	Current Ratio	Graham Number	Ebt Per Ebit	Quick Ratio	Cash Ratio	Debt Ratio	Market Cap
Total Assets		-0.36	0.87	0.24	0.31	-0.83	-0.89	-0.31	0.06	0.06	0.06	0.54	0.09	-0.14	-0.39	0.18	0.29	-0.37	-0.44	0.18	-0.3
Net Debt	-0.36		-0.04	0.66	0.62	0.63	0.41	-0.36	-0.38	0.23	0.23	0.08	-0.02	0.06	0.15	-0.64	0.3	0.14	0.56	0.29	0.56
Total Liab	0.87	-0.04		0.32	0.48	-0.54	-0.67	-0.29	0.09	0.41	0.41	0.5	0.23	-0.21	-0.49	-0.11	0.38	-0.48	-0.44	0.59	-0.12
Common Stock	0.24	0.66	0.32		0.9	0.16	-0.12	-0.34	-0.36	0.23	0.23	0.28	-0.14	0.03	-0.01	-0.63	0.74	-0.01	0.27	0.05	0.39
Capital Stock	0.31	0.62	0.48	0.9		0.06	-0.25	-0.4	-0.28	0.38	0.38	0.44	-0.06	0.02	-0.04	-0.53	0.62	-0.04	0.21	0.4	0.54
Total Revenue	-0.83	0.63	-0.54	0.16	0.06		0.94	0.35	0.03	0.31	0.31	-0.47	-0.08	0.07	0.14	-0.67	0.12	0.13	0.29	0.03	0.39
Gross Profit	-0.89	0.41	-0.67	-0.12	-0.25	0.94		0.49	0.18	0.16	0.16	-0.48	-0.05	0.07	0.15	-0.52	-0.16	0.13	0.21	-0.09	0.26
Net Income	-0.31	-0.36	-0.29	-0.34	-0.4	0.35	0.49		0.55	0.22	0.22	-0.47	-0.02	-0.03	-0.16	-0.3	-0.04	-0.17	-0.45	-0.13	-0.3
Tax Provision	0.06	-0.38	0.09	-0.36	-0.28	0.03	0.18	0.55		0.2	0.2	0.18	-0.3	-0.07	-0.45	-0.16	-0.2	-0.45	-0.62	0.14	-0.03
Ptb Ratio	0.06	0.23	0.41	0.23	0.38	0.31	0.16	0.22	0.2		1.0	0.01	0.4	-0.01	-0.12	-0.49	0.46	-0.13	-0.16	0.58	0.37
Pb Ratio	0.06	0.23	0.41	0.23	0.38	0.31	0.16	0.22	0.2	1.0		0.01	0.4	-0.01	-0.12	-0.49	0.46	-0.13	-0.16	0.58	0.37
Ev To Sales	0.54	0.08	0.5	0.28	0.44	-0.47	-0.48	-0.47	0.18	0.01	0.01		0.04	0.05	-0.03	-0.01	-0.19	-0.02	0.07	0.28	0.42
Pfcf Ratio	0.09	-0.02	0.23	-0.14	-0.06	-0.08	-0.05	-0.02	-0.3	0.4	0.4	0.04		0.43	0.49	0.05	-0.14	0.49	0.3	0.25	-0.02
Pe Ratio	-0.14	0.06	-0.21	0.03	0.02	0.07	0.07	-0.03	-0.07	-0.01	-0.01	0.05	0.43		0.81	0.04	-0.05	0.81	0.6	-0.21	0.17
Current Ratio	-0.39	0.15	-0.49	-0.01	-0.04	0.14	0.15	-0.16	-0.45	-0.12	-0.12	-0.03	0.49	0.81		0.2	-0.21	1.0	0.87	-0.33	0.31
Graham Number	0.18	-0.64	-0.11	-0.63	-0.53	-0.67	-0.52	-0.3	-0.16	-0.49	-0.49	-0.01	0.05	0.04	0.2		-0.46	0.21	0.02	-0.23	-0.34
Ebt Per Ebit	0.29	0.3	0.38	0.74	0.62	0.12	-0.16	-0.04	-0.2	0.46	0.46	-0.19	-0.14	-0.05	-0.21	-0.46		-0.21	-0.1	0.01	0.0
Quick Ratio	-0.37	0.14	-0.48	-0.01	-0.04	0.13	0.13	-0.17	-0.45	-0.13	-0.13	-0.02	0.49	0.81	1.0	0.21	-0.21		0.87	-0.33	0.31
Cash Ratio	-0.44	0.56	-0.44	0.27	0.21	0.29	0.21	-0.45	-0.62	-0.16	-0.16	0.07	0.3	0.6	0.87	0.02	-0.1	0.87		-0.22	0.47
Debt Ratio	0.18	0.29	0.59	0.05	0.4	0.03	-0.09	-0.13	0.14	0.58	0.58	0.28	0.25	-0.21	-0.33	-0.23	0.01	-0.33	-0.22		0.29
Market Cap	-0.3	0.56	-0.12	0.39	0.54	0.39	0.26	-0.3	-0.03	0.37	0.37	0.42	-0.02	0.17	0.31	-0.34	0.0	0.31	0.47	0.29

Click cells to compare fundamentals

Another Deeper Perspective

The company reported the last year's revenue of 512.7 M. Reported Net Loss for the year was (40.24 M) with profit before taxes, overhead, and interest of 489.96 M.

	2018	2019	2020 (projected)
Book Value per Share	17.61	14.74	14.78
Asset Turnover	0.2	0.23	0.24

Book Value per Share Asset Turnover

Does Studio City have anything more to drop some light on in July?

Total Risk Alpha just dropped to -0.8, may suggest upcoming price depreciation. Studio City International exhibits very low volatility with skewness of -0.35 and kurtosis of 3.5. However, we advise investors to further study Studio City International technical indicators to make sure all market info is available and is reliable.

Our Final Take On Studio City

Whereas some other companies in the resorts & casinos industry are either recovering or due for a correction, Studio may not be as strong as the others in terms of longer-term growth potentials. To conclude, as of the 20th of July 2020, our ongoing 30 days buy-or-sell advice on the company is Sell. We believe Studio City is overvalued with average probability of distress for the next two years.

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Editorial Staff

Ellen Johnson is a Member of Macroaxis Editorial Board. Ellen covers public companies in North America, focusing primarily on valuation and volatility. Six years of experience in 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 Ellen Johnson do not own shares of Studio City International. Please refer to our Terms of Use for any information regarding our disclosure principles.

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