PCA vs PRA Which Outperforms?

Principal component analysis (PCA) and partial least squares regression analysis (PRA) are two commonly used techniques in stock market analysis. PCA is a statistical method that reduces the dimensionality of data by identifying new variables that capture the most important information in the original variables. PRA, on the other hand, is a regression technique that is used to predict stock prices based on a set of independent variables. Both techniques have their own strengths and weaknesses, and understanding the differences between them is crucial for successful stock market analysis.

PCA or PRA?

When comparing PCA and PRA, different investors may prioritize various metrics based on their investment strategies and goals. So, ask yourself what type of investor you are. This will guide you in determining which metrics are most important for your investment decision between PCA and PRA.

Dividend Investors:

Dividend investors look for stable and growing income streams, using dividend metrics to assess potential investments. A company's dividend yield essentially measures the size of its dividend relative to the total market value of the company. PCA has a dividend yield of 3.74%, while PRA has a dividend yield of -%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. PCA reports a 5-year dividend growth of 0.00% year and a payout ratio of 0.00%. On the other hand, PRA reports a 5-year dividend growth of 0.00% year and a payout ratio of 0.00%.

Value Investors:

Value investors focus on financial metrics to determine a stock's intrinsic value compared to its market value. The Price-to-Earnings (P/E) Ratio links stock price to a company's earnings per share, with PCA P/E ratio at 23.30 and PRA's P/E ratio at 19.19. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. PCA P/B ratio is 2.33 while PRA's P/B ratio is 0.68.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, PCA has seen a 5-year revenue growth of 0.33%, while PRA's is 0.07%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with PCA's ROE at 10.14% and PRA's ROE at 3.72%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are ¥2150.00 for PCA and $20.99 for PRA. Over the past year, PCA's prices ranged from ¥1038.00 to ¥2530.00, with a yearly change of 143.74%. PRA's prices fluctuated between $18.64 and $31.43, with a yearly change of 68.62%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.