In trying to determine how profitable a company is per asset dollar, we can take a look at the firm’s Return on Assets. Return on assets is calculated by dividing a company’s net income (usually annual income) by its total assets, and is displayed as a percentage. At the time of writing, Puma Biotechnology, Inc. (NasdaqGS:PBYI) has -0.585461 ROA. The measure is commonly used to compare the performance of businesses within the same industry, since it is very difficult for someone to obfuscate the cash flow figure. Thus, the ratio is quite a reliable and comparable measure of asset performance across an industry.
Investors often have to decide how aggressive they are going to be in the stock market. Having the mindset of getting rich quick may result in the rapid loss of capital. Of course, there are those who have possibly had luck on their side, but jumping in head first without a plan can be a recipe for disaster. It may be tempting to take a leap with a risky stock. However, high returns in the equity market may come with extensive risk and volatility. Managing that risk in turbulent markets may help keep the average investor above water when things swing the wrong way. Investors may want to assess if they are trading too much or trading the wrong types of stocks. Doing all the research may involve keeping a close tab on technicals, fundamentals, relevant economic data, and earnings reports. Investors may have to find a way to keep the rational side from being consumed by irrational behavior when analyzing the markets.
Valuation Scores
Checking in on some valuation rankings, Puma Biotechnology, Inc. (NasdaqGS:PBYI) has a Value Composite score of 86. Developed by James O’Shaughnessy, the VC score uses five valuation ratios. These ratios are price to earnings, price to cash flow, EBITDA to EV, price to book value, and price to sales. The VC is displayed as a number between 1 and 100. In general, a company with a score closer to 0 would be seen as undervalued, and a score closer to 100 would indicate an overvalued company. Adding a sixth ratio, shareholder yield, we can view the Value Composite 2 score which is currently sitting at 86.
Puma Biotechnology, Inc. (NasdaqGS:PBYI) has a current MF Rank of 14957. Developed by hedge fund manager Joel Greenblatt, the intention of the formula is to spot high quality companies that are trading at an attractive price. The formula uses ROIC and earnings yield ratios to find quality, undervalued stocks. In general, companies with the lowest combined rank may be the higher quality picks.
The price to book ratio or market to book ratio for Puma Biotechnology, Inc. (NasdaqGS:PBYI) currently stands at 14.993400. The ratio is calculated by dividing the stock price per share by the book value per share. This ratio is used to determine how the market values the equity. A ratio of under 1 typically indicates that the shares are undervalued. A ratio over 1 indicates that the market is willing to pay more for the shares. There are often many underlying factors that come into play with the Price to Book ratio so all additional metrics should be considered as well.
Ever wonder how investors predict positive share price momentum? The Cross SMA 50/200, also known as the “Golden Cross” is the fifty day moving average divided by the two hundred day moving average. The SMA 50/200 for Puma Biotechnology, Inc. (NasdaqGS:PBYI) is currently 1.01754. If the Golden Cross is greater than 1, then the 50 day moving average is above the 200 day moving average – indicating a positive share price momentum. If the Golden Cross is less than 1, then the 50 day moving average is below the 200 day moving average, indicating that the price might drop.
The Leverage Ratio of Puma Biotechnology, Inc. (NasdaqGS:PBYI) is 0.717474. Leverage ratio is the total debt of a company divided by total assets of the current and past year divided by two. Companies take on debt to finance their day to day operations. The leverage ratio can measure how much of a company’s capital comes from debt. With this ratio, investors can better estimate how well a company will be able to pay their long and short term financial obligations.
Volatility
Stock volatility is a percentage that indicates whether a stock is a desirable purchase. Investors look at the Volatility 12m to determine if a company has a low volatility percentage or not over the course of a year. The Volatility 12m of Puma Biotechnology, Inc. (NasdaqGS:PBYI) is 105.310900. This is calculated by taking weekly log normal returns and standard deviation of the share price over one year annualized. The lower the number, a company is thought to have low volatility. The Volatility 3m is a similar percentage determined by the daily log normal returns and standard deviation of the share price over 3 months. The Volatility 3m of Puma Biotechnology, Inc. (NasdaqGS:PBYI) is 130.358600. The Volatility 6m is the same, except measured over the course of six months. The Volatility 6m is 100.783400.
Quant Scores
The Q.i. Value of Puma Biotechnology, Inc. (NasdaqGS:PBYI) is 69.00000. The Q.i. Value is a helpful tool in determining if a company is undervalued or not. The Q.i. Value is calculated using the following ratios: EBITDA Yield, Earnings Yield, FCF Yield, and Liquidity. The lower the Q.i. value, the more undervalued the company is thought to be.
The Piotroski F-Score is a scoring system between 1-9 that determines a firm’s financial strength. The score helps determine if a company’s stock is valuable or not. The Piotroski F-Score of Puma Biotechnology, Inc. (NasdaqGS:PBYI) is 4. A score of nine indicates a high value stock, while a score of one indicates a low value stock. The score is calculated by the return on assets (ROA), Cash flow return on assets (CFROA), change in return of assets, and quality of earnings. It is also calculated by a change in gearing or leverage, liquidity, and change in shares in issue. The score is also determined by change in gross margin and change in asset turnover.
The M-Score, conceived by accounting professor Messod Beneish, is a model for detecting whether a company has manipulated their earnings numbers or not. Puma Biotechnology, Inc. (NasdaqGS:PBYI) has an M-Score of -0.942329. The M-Score is based on 8 different variables: Days’ sales in receivables index, Gross Margin Index, Asset Quality Index, Sales Growth Index, Depreciation Index, Sales, General and Administrative expenses Index, Leverage Index and Total Accruals to Total Assets. A score higher than -1.78 is an indicator that the company might be manipulating their numbers.
The Gross Margin Score is calculated by looking at the Gross Margin and the overall stability of the company over the course of 8 years. The score is a number between one and one hundred (1 being best and 100 being the worst). The Gross Margin Score of Puma Biotechnology, Inc. (NasdaqGS:PBYI) is 1.00000. The more stable the company, the lower the score. If a company is less stable over the course of time, they will have a higher score.
Trying to project the day to day short-term movements of the stock market may be all but impossible. Stocks have the tendency to make sudden moves on even the slightest bit of news or for apparently no reason at all. The daily trader may be looking to capitalize on swings or momentum, but the long-term investor may be searching for stability and consistency over a sustained period of time. During trading sessions, stock movements can seem like a popularity contest from time to time. Even after careful study, there may be no logical reason for a particular stock move. Riding out the waves of uncertainty may not be easy, but having a full-proof plan for when markets erode may just be the savior. Having the patience to wait out abnormal moves may help evade the mistake of letting go too soon out of panic.
Taking a look at some key metrics and ratios for Genesee & Wyoming Inc. (NYSE:GWR), we note that the ROA or Return on Assets stands at 0.025775. Return on Assets shows how many dollars of earnings result from each dollar of assets the company controls. Return on assets gives an indication of the capital intensity of the company, which will also depend on the type of industry.
Individual investors are constantly hearing about the next hot stock to buy. Acting purely on these types of tips can be hazardous to the portfolio if the research is not completed. Sometimes these stock tips will pan out and be correct, other times they can leave the investor wondering why they acted on the speculative advice. Even if a stock tip is correct, the results may have already been manifested and the investor would simply be getting in way too late. Knowing what information is reliable can drastically improve the chances of making smarter stock picks. Even the most praised stocks may not be able to withstand an overall market downturn.
In addition to ROA, there are a number of additional ratios and Quant signals available to investors in order to decipher if the shares are a good fit for their portfolio. The Shareholder Yield is a way that investors can see how much money shareholders are receiving from a company through a combination of dividends, share repurchases and debt reduction. The Shareholder Yield of Genesee & Wyoming Inc. (NYSE:GWR) is 0.093296. This percentage is calculated by adding the dividend yield plus the percentage of shares repurchased. Dividends are a common way that companies distribute cash to their shareholders. Similarly, cash repurchases and a reduction of debt can increase the shareholder value, too. Another way to determine the effectiveness of a company’s distributions is by looking at the Shareholder yield (Mebane Faber). The Shareholder Yield (Mebane Faber) of Genesee & Wyoming Inc. NYSE:GWR is 0.06008. This number is calculated by looking at the sum of the dividend yield plus percentage of sales repurchased and net debt repaid yield.
The EBITDA Yield is a great way to determine a company’s profitability. This number is calculated by dividing a company’s earnings before interest, taxes, depreciation and amortization by the company’s enterprise value. Enterprise Value is calculated by taking the market capitalization plus debt, minority interest and preferred shares, minus total cash and cash equivalents. The EBITDA Yield for Genesee & Wyoming Inc. (NYSE:GWR) is 0.092991.
The Earnings to Price yield of Genesee & Wyoming Inc. NYSE:GWR is 0.042153. This is calculated by taking the earnings per share and dividing it by the last closing share price. This is one of the most popular methods investors use to evaluate a company’s financial performance. Earnings Yield is calculated by taking the operating income or earnings before interest and taxes (EBIT) and dividing it by the Enterprise Value of the company. The Earnings Yield for Genesee & Wyoming Inc. NYSE:GWR is 0.057653. Earnings Yield helps investors measure the return on investment for a given company. Similarly, the Earnings Yield Five Year Average is the five year average operating income or EBIT divided by the current enterprise value. The Earnings Yield Five Year average for Genesee & Wyoming Inc. (NYSE:GWR) is 0.053842.
The Price to book ratio is the current share price of a company divided by the book value per share. The Price to Book ratio for Genesee & Wyoming Inc. NYSE:GWR is 1.349383. A lower price to book ratio indicates that the stock might be undervalued. Similarly, Price to cash flow ratio is another helpful ratio in determining a company’s value. The Price to Cash Flow for Genesee & Wyoming Inc. (NYSE:GWR) is 8.890053. This ratio is calculated by dividing the market value of a company by cash from operating activities. Additionally, the price to earnings ratio is another popular way for analysts and investors to determine a company’s profitability. The price to earnings ratio for Genesee & Wyoming Inc. (NYSE:GWR) is 23.723347. This ratio is found by taking the current share price and dividing by earnings per share.
Quant
The Piotroski F-Score is a scoring system between 1-9 that determines a firm’s financial strength. The score helps determine if a company’s stock is valuable or not. The Piotroski F-Score of Genesee & Wyoming Inc. (NYSE:GWR) is 5. A score of nine indicates a high value stock, while a score of one indicates a low value stock. The score is calculated by the return on assets (ROA), Cash flow return on assets (CFROA), change in return of assets, and quality of earnings. It is also calculated by a change in gearing or leverage, liquidity, and change in shares in issue. The score is also determined by change in gross margin and change in asset turnover.
The Gross Margin Score is calculated by looking at the Gross Margin and the overall stability of the company over the course of 8 years. The score is a number between one and one hundred (1 being best and 100 being the worst). The Gross Margin Score of Genesee & Wyoming Inc. (NYSE:GWR) is 10.00000. The more stable the company, the lower the score. If a company is less stable over the course of time, they will have a higher score.
The ERP5 Rank is an investment tool that analysts use to discover undervalued companies. The ERP5 looks at the Price to Book ratio, Earnings Yield, ROIC and 5 year average ROIC. The ERP5 of Genesee & Wyoming Inc. (NYSE:GWR) is 7023. The lower the ERP5 rank, the more undervalued a company is thought to be.
The M-Score, conceived by accounting professor Messod Beneish, is a model for detecting whether a company has manipulated their earnings numbers or not. Genesee & Wyoming Inc. (NYSE:GWR) has an M-Score of -2.620879. The M-Score is based on 8 different variables: Days’ sales in receivables index, Gross Margin Index, Asset Quality Index, Sales Growth Index, Depreciation Index, Sales, General and Administrative expenses Index, Leverage Index and Total Accruals to Total Assets. A score higher than -1.78 is an indicator that the company might be manipulating their numbers.
The Value Composite One (VC1) is a method that investors use to determine a company’s value. The VC1 of Genesee & Wyoming Inc. (NYSE:GWR) is 33. A company with a value of 0 is thought to be an undervalued company, while a company with a value of 100 is considered an overvalued company. The VC1 is calculated using the price to book value, price to sales, EBITDA to EV, price to cash flow, and price to earnings. Similarly, the Value Composite Two (VC2) is calculated with the same ratios, but adds the Shareholder Yield. The Value Composite Two of Genesee & Wyoming Inc. (NYSE:GWR) is 24.
Investors may be looking into the crystal ball trying to calculate where the equity market will be shifting as we move into the second half of the year. Investors may be hard pressed to find bargains with the markets still riding high. Sometimes, keeping it simple may be exactly what the doctor ordered when approaching the markets. Focusing on relevant data instead of information that breezes through may make a huge difference for the individual investor. Focusing on companies that have strong competitive advantages may help fight off unwelcome surprises that often come with uncertain economic landscapes. Focusing on the long-term might be right for some investors. Developing a good safety margin may also help keep the important investing factors in focus. Covering all the bases may help increase the odds of success when trading equities.
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