AC Investment Research

LON:HRN HORNBY PLC Research Report

Outlook: HORNBY PLC assigned short-term Ba1 & long-term Ba1 estimated rating.
Dominant Strategy : Sell
Time series to forecast n: 23 Dec 2022 for (n+1 year)
Methodology : Modular Neural Network (Speculative Sentiment Analysis)

Abstract

The prediction of a stock market direction may serve as an early recommendation system for short-term investors and as an early financial distress warning system for long-term shareholders. (Jordan, M.I. and Mitchell, T.M., 2015. Machine learning: Trends, perspectives, and prospects. Science, 349(6245), pp.255-260.) We evaluate HORNBY PLC prediction models with Modular Neural Network (Speculative Sentiment Analysis) and Multiple Regression1,2,3,4 and conclude that the LON:HRN stock is predictable in the short/long term. According to price forecasts for (n+1 year) period, the dominant strategy among neural network is: Sell

Key Points

  1. Is it better to buy and sell or hold?
  2. Should I buy stocks now or wait amid such uncertainty?
  3. What is the use of Markov decision process?

LON:HRN Target Price Prediction Modeling Methodology

We consider HORNBY PLC Decision Process with Modular Neural Network (Speculative Sentiment Analysis) where A is the set of discrete actions of LON:HRN stock holders, F is the set of discrete states, P : S × F × S → R is the transition probability distribution, R : S × F → R is the reaction function, and γ ∈ [0, 1] is a move factor for expectation.1,2,3,4


F(Multiple Regression)5,6,7= p a 1 p a 2 p 1 n p j 1 p j 2 p j n p k 1 p k 2 p k n p n 1 p n 2 p n n X R(Modular Neural Network (Speculative Sentiment Analysis)) X S(n):→ (n+1 year) i = 1 n r i

n:Time series to forecast

p:Price signals of LON:HRN stock

j:Nash equilibria (Neural Network)

k:Dominated move

a:Best response for target price

 

For further technical information as per how our model work we invite you to visit the article below: 

How do AC Investment Research machine learning (predictive) algorithms actually work?

LON:HRN Stock Forecast (Buy or Sell) for (n+1 year)

Sample Set: Neural Network
Stock/Index: LON:HRN HORNBY PLC
Time series to forecast n: 23 Dec 2022 for (n+1 year)

According to price forecasts for (n+1 year) period, the dominant strategy among neural network is: Sell

X axis: *Likelihood% (The higher the percentage value, the more likely the event will occur.)

Y axis: *Potential Impact% (The higher the percentage value, the more likely the price will deviate.)

Z axis (Grey to Black): *Technical Analysis%

IFRS Reconciliation Adjustments for HORNBY PLC

  1. For example, Entity A, whose functional currency is its local currency, has a firm commitment to pay FC150,000 for advertising expenses in nine months' time and a firm commitment to sell finished goods for FC150,000 in 15 months' time. Entity A enters into a foreign currency derivative that settles in nine months' time under which it receives FC100 and pays CU70. Entity A has no other exposures to FC. Entity A does not manage foreign currency risk on a net basis. Hence, Entity A cannot apply hedge accounting for a hedging relationship between the foreign currency derivative and a net position of FC100 (consisting of FC150,000 of the firm purchase commitment—ie advertising services—and FC149,900 (of the FC150,000) of the firm sale commitment) for a nine-month period.
  2. The fair value of a financial instrument at initial recognition is normally the transaction price (ie the fair value of the consideration given or received, see also paragraph B5.1.2A and IFRS 13). However, if part of the consideration given or received is for something other than the financial instrument, an entity shall measure the fair value of the financial instrument. For example, the fair value of a long-term loan or receivable that carries no interest can be measured as the present value of all future cash receipts discounted using the prevailing market rate(s) of interest for a similar instrument (similar as to currency, term, type of interest rate and other factors) with a similar credit rating. Any additional amount lent is an expense or a reduction of income unless it qualifies for recognition as some other type of asset.
  3. Expected credit losses reflect an entity's own expectations of credit losses. However, when considering all reasonable and supportable information that is available without undue cost or effort in estimating expected credit losses, an entity should also consider observable market information about the credit risk of the particular financial instrument or similar financial instruments.
  4. The requirements in paragraphs 6.8.4–6.8.8 may cease to apply at different times. Therefore, in applying paragraph 6.9.1, an entity may be required to amend the formal designation of its hedging relationships at different times, or may be required to amend the formal designation of a hedging relationship more than once. When, and only when, such a change is made to the hedge designation, an entity shall apply paragraphs 6.9.7–6.9.12 as applicable. An entity also shall apply paragraph 6.5.8 (for a fair value hedge) or paragraph 6.5.11 (for a cash flow hedge) to account for any changes in the fair value of the hedged item or the hedging instrument.

*International Financial Reporting Standards (IFRS) adjustment process involves reviewing the company's financial statements and identifying any differences between the company's current accounting practices and the requirements of the IFRS. If there are any such differences, neural network makes adjustments to financial statements to bring them into compliance with the IFRS.

Conclusions

HORNBY PLC assigned short-term Ba1 & long-term Ba1 estimated rating. We evaluate the prediction models Modular Neural Network (Speculative Sentiment Analysis) with Multiple Regression1,2,3,4 and conclude that the LON:HRN stock is predictable in the short/long term. According to price forecasts for (n+1 year) period, the dominant strategy among neural network is: Sell

LON:HRN HORNBY PLC Financial Analysis*

Rating Short-Term Long-Term Senior
Outlook*Ba1Ba1
Income StatementBaa2B2
Balance SheetCBa2
Leverage RatiosB2C
Cash FlowB3Baa2
Rates of Return and ProfitabilityBaa2Baa2

*Financial analysis is the process of evaluating a company's financial performance and position by neural network. It involves reviewing the company's financial statements, including the balance sheet, income statement, and cash flow statement, as well as other financial reports and documents.
How does neural network examine financial reports and understand financial state of the company?

Prediction Confidence Score

Trust metric by Neural Network: 93 out of 100 with 674 signals.

References

  1. F. A. Oliehoek and C. Amato. A Concise Introduction to Decentralized POMDPs. SpringerBriefs in Intelligent Systems. Springer, 2016
  2. O. Bardou, N. Frikha, and G. Pag`es. Computing VaR and CVaR using stochastic approximation and adaptive unconstrained importance sampling. Monte Carlo Methods and Applications, 15(3):173–210, 2009.
  3. J. Ott. A Markov decision model for a surveillance application and risk-sensitive Markov decision processes. PhD thesis, Karlsruhe Institute of Technology, 2010.
  4. S. Bhatnagar. An actor-critic algorithm with function approximation for discounted cost constrained Markov decision processes. Systems & Control Letters, 59(12):760–766, 2010
  5. Clements, M. P. D. F. Hendry (1995), "Forecasting in cointegrated systems," Journal of Applied Econometrics, 10, 127–146.
  6. C. Szepesvári. Algorithms for Reinforcement Learning. Synthesis Lectures on Artificial Intelligence and Machine Learning. Morgan & Claypool Publishers, 2010
  7. Hartigan JA, Wong MA. 1979. Algorithm as 136: a k-means clustering algorithm. J. R. Stat. Soc. Ser. C 28:100–8
Frequently Asked QuestionsQ: What is the prediction methodology for LON:HRN stock?
A: LON:HRN stock prediction methodology: We evaluate the prediction models Modular Neural Network (Speculative Sentiment Analysis) and Multiple Regression
Q: Is LON:HRN stock a buy or sell?
A: The dominant strategy among neural network is to Sell LON:HRN Stock.
Q: Is HORNBY PLC stock a good investment?
A: The consensus rating for HORNBY PLC is Sell and assigned short-term Ba1 & long-term Ba1 estimated rating.
Q: What is the consensus rating of LON:HRN stock?
A: The consensus rating for LON:HRN is Sell.
Q: What is the prediction period for LON:HRN stock?
A: The prediction period for LON:HRN is (n+1 year)

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