These numbers are coming from the company’s 8-K report. Fourth quarter GAAP diluted earnings per share came in at $0.84 and non-GAAP diluted earnings per share came in at $1.05. Cabela’s CLUB average receivables great 13.3% and consolidated retail comparable store sales decreased 6.5% on a shift-adjusted calendar basis. With average numbers, this could have been the right time for a company to buy Cabela’s, but you would have to dive deep to gain a firm understanding of the reasoning behind the purchase.
Now, taking a look at the chart using the monthly time frame, we can see that price has been falling since October of 2016. It appears to be filling the gap it created to the upside but has continued to fall after being filled. Even with the news of the acquisition, price has not reacted. Right now, the chart isn’t telling us a whole lot but the overall story is the main driving factor. I would use all the data you have in front of you to formulate a well rounded opinion because it could be a volatile future for this particular stock.
How important is Cabelas's Liquidity
Cabelas
financial leverage refers to using borrowed capital as a funding source to finance Cabelas ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. Cabelas 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 Cabelas' 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 Cabelas' 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 Cabelas's total debt and its cash.
Breaking down Cabelas Indicators
Risks
Taking a look at the 10-K report, you will find a complete list of risks along with details on the risks provided by the company. For now, here are a couple to keep in mind while completing your research. First, the changing retail climate that has been evident in the market certainly could affect the company more than it has already. Secondly, if this company continues to act as Cabela’s, they depend on seasonality to sell items. A warmer winter or milder summer could affect sales of certain products, hurting the numbers and the stock price.
Conclusion
Cabela’s might not be the stock for you right now as there are so many unknowns right now. If you feel this is still of interest, I would dive deep into the fundamental health of the company and decide if your portfolio can handle the risk. If you still have questions after you’ve completed your research, reach out to an investing professional and they can help point you in the right direction. Again, be aware of the macro condition involving this stock more than you normally would as it can impact stock price very quickly.
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Nathan Young is a Senior Member of Macroaxis Editorial Board - US Equity Analysis. With years of experience in the financial sector, Nathan brings a diverse base of knowledge. Specifically, he has in-depth understanding of application of technical and fundamental analysis across different equity instruments. Utilizing SEC filings and technical indicators, Nathan provides a reputable analysis of companies trading in the United States.
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