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Is Key Energy (USA Stocks:KEGX) gaining more confidence from investors?

December 26, 2022  By
In general, we focus on analyzing Key Energy (USA Stocks:KEGX) price patterns and their correlations with different microeconomic environment and drivers. We also apply predictive analytics to build Key Energy Services daily price indicators and compare them against related drivers. While this unique economic environment continues, Key Energy may throw investors more surprises in two-three weeks. We will evaluate why we are still confident in anticipation of a recovery.
Published over a year ago
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Reviewed by Gabriel Shpitalnik

Key Energy holds a performance score of 13 on a scale of zero to a hundred. The company secures a Beta (Market Risk) of -4.8109, which conveys a somewhat significant risk relative to the market. Let's try to break down what Key Energy's beta means in this case. As returns on the market increase, returns on owning Key Energy are expected to decrease by larger amounts. On the other hand, during market turmoil, Key Energy is expected to outperform it. Although it is essential to pay attention to Key Energy Services price patterns, it is also good to be reasonable about what you can do with equity historical price patterns. Our philosophy towards estimating future potential of any stock is to look not only at its past charts but also at the business as a whole, including all available fundamental and technical indicators. To evaluate if Key Energy expected return of 31.67 will be sustainable into the future, we have found twenty-eight different technical indicators, which can help you to check if the expected returns are sustainable. Use Key Energy Services semi variance, as well as the relationship between the daily balance of power and price action indicator to analyze future returns on Key Energy Services.
The successful prediction of Key Energy 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 Key Energy Services, 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 Key Energy based on Key Energy hews, social hype, general headline patterns, and widely used predictive technical indicators. We also calculate exposure to Key Energy's market risk, different technical and fundamental indicators, relevant financial multiples and ratios, and then comparing them to Key Energy's related companies.

Watch out for price decline

Please consider monitoring Key Energy on a daily basis if you are holding a position in it. Key Energy is trading at a penny-stock level, and the possibility of delisting is much higher compared to other pink sheets. However, just because the pink sheet is trading under one dollar, does not mean it will be marked for deletion. Most exchanges require public instruments, such as Key Energy stock to be traded above the $1 level to remain listed. If Key Energy pink sheet 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 Key expected Price

Key Energy technical pink sheet 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, pink sheet market cycles, or different charting patterns.
A focus of Key Energy technical analysis is to determine if market prices reflect all relevant information impacting that market. A technical analyst looks at the history of Key Energy 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 important is Key Energy's Liquidity

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

What is driving Key Energy Investor Appetite?

The current price rise of Key Energy Services may raise some interest from investors. The stock closed today at a share price of 0.25 on 2,449 in trading volume. The company management teams may have good odds in positioning the firm resources to exploit market volatility in January. The stock standard deviation of daily returns for 90 days investing horizon is currently 177.59. The very high volatility is mostly attributed to the latest market swings and not very good earnings reports from some of the Key Energy Services partners.
 2021 2022 (projected)
Long Term Debt to Equity4.775.14
Interest Coverage0.630.65

Cost of Revenue Breakdown

Key Energy Cost of Revenue yearly trend continues to be fairly stable with very little volatility. Cost of Revenue is likely to outpace its year average in 2022. Cost of Revenue usually refers to the aggregate cost of goods produced and sold and services rendered during the reporting period. Key Energy Cost of Revenue is fairly stable at the moment as compared to the past year. Key Energy reported Cost of Revenue of 300.12 Million in 2021
2013
2014
2015
2016
2018
2019
2021
2022
20131.11 Billion
20141.06 Billion
2015714.64 Million
2016332.33 Million
2018406.4 Million
2019333.46 Million
2021300.12 Million
2022308.01 Million

Over 3 percent rise for Key Energy. What does it mean for investors?

The treynor ratio is down to -6.48 as of today. Key Energy Services is displaying above-average volatility over the selected time horizon. Investors should scrutinize Key Energy Services independently to ensure intended market timing strategies are aligned with expectations about Key Energy volatility. Key Energy Services is a potential penny stock. Although Key Energy may be in fact a good instrument to invest, many penny pink sheets are speculative in nature and are subject to artificial price hype. Please make sure you totally understand the upside potential and downside risk of investing in Key Energy Services. We encourage investors to look for signals such as email spams, message board hypes, claims of breakthroughs, volume upswings, sudden news releases, promotions that are not reported, or demotions released before SEC filings. Please also check biographies and work history of current and past company officers before investing in high volatility instruments, penny stocks, or equities with microcap classification. You can indeed make money on Key Energy instrument if you perfectly time your entry and exit. However, remember that penny otcs that have been the subject of artificial hype usually unable to maintain their increased share price for more than just a few days. The price of a promoted high volatility instrument will almost always revert back. The only way to increase shareholder value is through legitimate performance backed up by solid fundamentals.

Our Conclusion on Key Energy

While some other companies within the oil & gas equipment & services industry are still a little expensive, even after the recent corrections, Key Energy may offer a potential longer-term growth to investors. Taking everything into account, as of the 26th of December 2022, our analysis shows that Key Energy responds to the market. The company is undervalued and projects low odds of financial turmoil for the next 2 years. However, our up-to-date 90 days Buy-Hold-Sell recommendation on the company is Strong Sell.

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Editorial Staff

Aina Ster is a Member of Macroaxis Editorial Board. Aina delivers weekly perspective on ongoing market and economic trends, analysis and tips from predictive analysis to forecasting across various financial instruments. 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 Aina Ster do not own shares of Key Energy Services. Please refer to our Terms of Use for any information regarding our disclosure principles.

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