Despite a challenging market environment, Paramount Gold Nevada (PZG) shows potential for outperformance with a promising Jensen Alpha of
0.1624 and a Market Risk Adjusted Performance of
12.5. However, investors should be cautious due to the company's high Coefficient Of Variation of
1.6K and a significant loss in Gross Profit of
632.5K, indicating substantial risk and financial instability.
Main Points
By comparing basic indicators between Paramount Gold and Loncor, we can analyze the impact of market volatility on both companies' prices and assess their potential to diversify market risk when combined in a portfolio. Pair trading strategies can also be employed, such as matching a long position in Loncor with a short position in Paramount Gold. For more details, check our pair correlation module.
Now, let's examine the assets. The asset utilization indicator signifies the revenue generated for every dollar of assets a company reports. Paramount Gold has an asset utilization ratio of 0.34 percent, meaning the company generates $0.003389 for each dollar of assets. A rising asset utilization indicates that Paramount Gold Nevada is becoming more efficient in using its assets for daily operations.
How important is Paramount Gold's Liquidity
Paramount Gold
financial leverage refers to using borrowed capital as a funding source to finance Paramount Gold Nevada ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. Paramount Gold 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 Paramount Gold'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 Paramount Gold'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 Paramount Gold's total debt and its cash.
Breaking down Paramount Gold Indicators
Total Debt Breakdown
Let me take a closer look at Paramount Gold total debt. Based on the latest financial disclosure, Paramount Gold Nevada has a Total Debt of 5.85
M. This is 99.72% lower than that of the Metals & Mining sector and 99.29% lower than that of the
Materials industry. The total debt for all United States stocks is 99.89% higher than that of Paramount Gold. As for Loncor Gold we see total debt of 27.6
K, which is 100.0% lower than that of the Materials
| PZG | 5.85 Million | 0.7 |
| Sector | 825.33 Million | 99.29 |
| LONCF | 27,602 | 0.003321 |
As Warren Buffet once wisely noted, risk comes from not knowing what you're doing. Paramount Gold Nevada (PZG) and Loncor Gold (LONCF) are two stocks that investors should approach with caution in March.
Despite a Wall Street target price of $1.75, Paramount's current liabilities stand at $559.9K, with a net asset of $54.31M. The company's risk-adjusted performance is a mere 0.0407, and with a high beta of 1.89, the stock is more volatile than the market. Furthermore, the probability of bankruptcy is a concerning 62.95%. While the company's market capitalization is $20.58M, its total debt is $5.85M, indicating a potential risk for investors. Therefore, despite the potential upside of 3.23, both PZG and LONCF may not outperform the market in March. .
Our perspective of the current Paramount Gold rise
Paramount Gold Nevada stock's semi-variance has surged over 4.13, signaling a positive trading momentum and a potential bullish trend. This could be due to factors like increased investor confidence, positive market sentiment, or robust
financial performance. As of February 9th, Paramount Gold's Semi Deviation stands at 2.03, with a coefficient of variation of 1620.87, and Risk Adjusted Performance of 0.0407. The
technical analysis model allows investors to assess Paramount Gold's technical drivers and their interrelations. This can help predict if the company's stock price will follow its past market data pattern or revert. Investors should also consider the information ratio, potential upside, and the relationship between the Potential Upside and kurtosis to evaluate if the current price of $0.37 per share is accurate. As Paramount Gold Nevada appears to be a penny stock, it's advisable to also check its total risk alpha.
Our Conclusion on Paramount Gold
While other companies within the gold industry are still a little expensive, even after the recent corrections, Paramount Gold may offer a potential longer-term growth to stockholders. The inconsistency in the assessment between current Paramount valuation and our trade advice on Paramount Gold 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 Paramount Gold.
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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 Paramount Gold Nevada. Please refer to our
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