Paychex currently holds roughly 1.23
B in cash with 1.51
B of positive cash flow from operations. This results in cash-per-share (CPS) ratio of 3.41.
Macroaxis provides advice on Paychex to complement and cross-verify current
analyst consensus on Paychex. Our recommendation engine determines the firm's potential to grow exclusively from the perspective of an investor's current risk tolerance and investing horizon.
Investing in Paychex, just like investing in any other equity instrument, is characterized by a strong risk-return correlation. High risks mean high returns and low risk means lower expected returns. Risk management is the act of identifying and assessing the potential risk and developing strategies to minimize these risks and earn maximum possible profits while holding Paychex along with other instruments in the same portfolio. Using conventional
technical analysis and
fundamental analysis to select individual securities into a portfolio complements risk management and adds value to overall investors' investing strategies.
Sophisticated investors, who have witnessed
many market ups and downs, anticipate that the market will even out over time. This tendency of Paychex's price to converge to an average value over time is called mean reversion. However, historically, high market prices usually discourage investors that believe in mean reversion to invest, while low prices are viewed as an opportunity to buy.
Please note, it is not enough to conduct a financial or market analysis of a single entity such as Paychex. Your research has to be compared to or analyzed against Paychex's peers to derive any actionable benefits. When done correctly, Paychex's competitive analysis will give you plenty of quantitative and qualitative data to validate your investment decisions or develop an entirely new strategy toward taking a position in Paychex.
How important is Paychex's Liquidity
Paychex
financial leverage refers to using borrowed capital as a funding source to finance Paychex ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. Paychex 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 Paychex'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 Paychex'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 Paychex's total debt and its cash.
Paychex Gross Profit
Paychex Gross Profit growth is one of the most critical measures in evaluating the company. The Gross Profit growth rate is calculated simply by comparing Paychex 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 Paychex Gross Profit growth over the last 10 years. Please check Paychex's
gross profit and other
fundamental indicators for more details.
Paychex Correlation with Peers
Investors in Paychex can reduce exposure to individual asset risk by holding a diversified portfolio of assets in addition to a long position in Paychex. Diversification will allow for the same portfolio return with reduced risk. The correlation table of Paychex and its peers is a two-dimensional matrix that shows the correlation coefficient between pairs of securities Paychex is related in some way. The cells in the table are color-coded to highlight significantly positive and negative relationships. Each cell shows the correlation between one pair of equities and can be used to run pair trading strategies or create efficient portfolios with
your current brokerage. Please check
volatility of Paychex for more details
Details
We consider Paychex very steady.
Paychex maintains Sharpe Ratio (i.e., Efficiency) of 0.0129, which implies the firm had 0.0129% of return per unit of risk over the last 3 months. Our standpoint towards forecasting the volatility of a stock is to use all available market data together with stock-specific
technical indicators that cannot be
diversified away. We have found twenty-one
technical indicators for Paychex, which you can use to evaluate the future volatility of the company. Please check Paychex
coefficient of variation of
(4,180), and Risk Adjusted Performance of
(0.029553) to confirm if the risk estimate we provide is consistent with the expected return of 0.0229%.
Momentum Analysis of Paychex suggests possible reversal in January
Current Information Ratio is up to -0.1. Price may slide again.
As of the 22nd of December, Paychex holds the
risk adjusted performance of
(0.029553), and Coefficient Of Variation of
(4,180). Compared to
fundamental indicators, the
technical analysis model allows you to check existing technical drivers of Paychex, as well as the relationship between them. Put it differently, you can use this information to find out if the company will indeed mirror its model of past market data, or the prices will eventually revert. We have analyzed and interpolated nineteen
technical drivers for Paychex, which can be compared to its competitors. Please check
Paychex standard deviation, as well as the
relationship between the value at risk and
kurtosis to decide if Paychex is priced some-what accurately, providing market reflects its current price of 114.77 per share. Given that Paychex has
jensen alpha of
(0.20), we recommend you to check out Paychex's recent market performance to make sure the company can sustain itself at a future point.
Our Takeaway on Paychex Investment
While other companies under the staffing & employment services industry are still a bit expensive, Paychex may offer a potential longer-term growth to investors. With an optimistic outlook on your 90 days horizon, it may be a good time to pick up new shares of Paychex or increase your existing holdings in the Stock as it seems the potential growth has not yet been fully factored into the current price. 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 Paychex.
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Gabriel Shpitalnik is a Member of Macroaxis Editorial Board. Gabriel is a young entrepreneur and writes predominantly on the business, technology, and finance sector. He likes to analyze different equity instruments across a wide range of industries focusing primarily on consumer products and evolving technologies.
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 Gabriel Shpitalnik do not own shares of Paychex. Please refer to our
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