Stock Focus: Magic Formula Review For iSelect Limited (ASX:ISU), Franklin Wireless Corp. (OTCPK:FKWL)

iSelect Limited (ASX:ISU) has a current MF Rank of 10379. Developed by hedge fund manager Joel Greenblatt, the intention of the formula is to discover 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.

Investors are constantly trying to make farsighted moves in the share market. Taking stock of personal strengths and weaknesses can aid the investor attack the market with heightened focus. Often times, individuals may fall into traps that could have been avoided. Coming up with a sound investment plan and setting realistic expectations may aid the inexperienced investor become better prepared and focused. Positive returns are attainable with the proper preparation and dedication. Investors working with a longer-term plan might be approaching the share market from a completely alternate angle than a shorter-term trader. Investors who plan to be in the market for a long timeframe of time may not be as concerned about the day to day fluctuations as short-term traders. 

Checking in on some valuation rankings, iSelect Limited (ASX:ISU) has a Value Composite score of 48. 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 outfit with a score closer to 0 would be seen as undervalued, and a score closer to 100 would indicate an overvalued outfit. Adding a sixth ratio, shareholder yield, we can view the Value Composite 2 score which is at present sitting at 38.

iSelect Limited (ASX:ISU) has a Price to Book ratio of 0.91. This ratio is determined by dividing the current stock price by the book value per share. Investors may use Price to Book to display how the market portrays the value of a stock. Checking in on some different ratios, the outfit has a Price to Cash Flow ratio of 30.19, and a current Price to Earnings ratio of -12.25. The P/E ratio is one of the most common ratios used for figuring out whether a outfit is overvalued or undervalued.

Shifting gears, we can see that iSelect Limited (ASX:ISU) has a Q.i. Value of 56. The Q.i. Value ranks companies using four ratios. These ratios consist of EBITDA Yield, FCF Yield, Liquidity, and Earnings Yield. The purpose of the Q.i. Value is to aid identify companies that are the most undervalued. Typically, the lower the value, the more undervalued the outfit tends to be.

Watching some historical volatility numbers on shares of iSelect Limited (ASX:ISU), we can see that the 12 month volatility is right now 83.39. The 6 month volatility is 45.90, and the 3 month is spotted at 54.78. Following volatility data can aid quantify how much the share price has fluctuated over the specified time timeframe. Although past volatility action may aid project future stock volatility, it may also be vastly alternate when taking into account different factors that may be driving price action during the measured time timeframe. 

At the time of writing, iSelect Limited (ASX:ISU) has a Piotroski F-Score of 3. The F-Score may aid detect companies with strengthening balance sheets. The score may also be used to discover the weak performers. Joseph Piotroski developed the F-Score which employs nine alternate variables based on the outfit financial statement. A single point is assigned to each test that a stock passes. Typically, a stock scoring an 8 or 9 would be seen as strong. On the different end, a stock with a score from 0-2 would be viewed as weak.

Investors may be interested in surveying the Gross Margin score on shares of iSelect Limited (ASX:ISU). The name at present has a score of 41. This score is derived from the Gross Margin (Marx) stability and growth over the previous eight years. The Gross Margin score lands on a scale from 1 to 100 where a score of 1 would be considered positive, and a score of 100 would be seen as negative.

The Shareholder Yield is a way that investors can see how much money shareholders are receiving from a outfit through a combination of dividends, share repurchases and debt reduction.  The Shareholder Yield of iSelect Limited (ASX:ISU) is 0.06.  This percentage is determined 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 accelerate the shareholder value, too.  Another way to understand the effectiveness of a outfit’s distributions is by viewing at the Shareholder yield (Mebane Faber).  The Shareholder Yield (Mebane Faber) of iSelect Limited ASX:ISU is -0.01.  This number is determined by viewing at the calculate of the dividend yield plus percentage of sales repurchased and net debt repaid yield.

Price Index

We can now take a quick gander at some historical share price index data. iSelect Limited (ASX:ISU) right now has a 10 month price index of 0.60. The price index is determined by dividing the current stock price by the stock price ten months ago. A ratio over one reveals an accelerate in stock price over the timeframe. A ratio lower than one signals that the price has decreased over that time timeframe. Looking at some other time periods, the 12 month price index is 0.52, the 24 month is 0.43, and the 36 month is 0.78. Narrowing in a bit closer, the 5 month price index is 0.94, the 3 month is 0.96, and the 1 month is at present 1.10.

A highly common way to study stocks is through fundamental analysis. Investors examining the fundamentals may be analyzing the underlying factors that can affect the performance of a particular outfit. When focusing in on a specific outfit, investors will look at outfit management, financial information, business prospects, and industry competition. The goal of digging into the numbers is sometimes times a way to add up the current value of a outfit and try to gauge the value into the future. Zooming in on the paramount statistics of a outfit can aid provide a glimpse of the outfit’s overall health.

Franklin Wireless Corp. (OTCPK:FKWL) has a current Magic Formula rank of 14120. The formula which was developed by hedge fund manager Joel Greenblatt, is intended to discover 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.

Receive News & Ratings Via Email - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings with MarketBeat.com's FREE daily email newsletter.

Some share market investors may abide to the saying, nothing ventured nothing gained. Others may operate by following the saying slow and steady wins the race. The correct move for one investor may not be the same for another. Some may opt for to go all in, while others may look to reduce exposure with stable long-term staple companies. Active equity investors may be forced to make difficult decisions at some point, but working difficult and being prepared may prove to be a portfolio booster. Dedicated investors are sometimes willing to put in the additional hours in order to make sure no stone is left unturned.

The Value Composite One (VC1) is a method that investors use to understand a outfit’s value.  The VC1 of Franklin Wireless Corp. (OTCPK:FKWL) is 45.  A outfit with a value of 0 is thought to be an undervalued outfit, while a outfit with a value of 100 is considered an overvalued outfit.  The VC1 is determined 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 determined with the same ratios, but adds the Shareholder Yield.  The Value Composite Two of Franklin Wireless Corp. (OTCPK:FKWL) is 51.

Shifting gears, we can see that Franklin Wireless Corp. (OTCPK:FKWL) has a Q.i. Value of 50. The Q.i. Value ranks companies using four ratios. These ratios consist of EBITDA Yield, FCF Yield, Liquidity, and Earnings Yield. The purpose of the Q.i. Value is to aid identify companies that are the most undervalued. Typically, the lower the value, the more undervalued the outfit tends to be.

Watching some historical volatility numbers on shares of Franklin Wireless Corp. (OTCPK:FKWL), we can see that the 12 month volatility is right now 37.46. The 6 month volatility is 59.07, and the 3 month is spotted at 61.47. Following volatility data can aid quantify how much the share price has fluctuated over the specified time timeframe. Although past volatility action may aid project future stock volatility, it may also be vastly alternate when taking into account different factors that may be driving price action during the measured time timeframe. 

Investors may be interested in surveying the Gross Margin score on shares of Franklin Wireless Corp. (OTCPK:FKWL). The name at present has a score of 27. This score is derived from the Gross Margin (Marx) stability and growth over the previous eight years. The Gross Margin score lands on a scale from 1 to 100 where a score of 1 would be considered positive, and a score of 100 would be seen as negative.

At the time of writing, Franklin Wireless Corp. (OTCPK:FKWL) has a Piotroski F-Score of 2. The F-Score may aid detect companies with strengthening balance sheets. The score may also be used to discover the weak performers. Joseph Piotroski developed the F-Score which employs nine alternate variables based on the outfit financial statement. A single point is assigned to each test that a stock passes. Typically, a stock scoring an 8 or 9 would be seen as strong. On the different end, a stock with a score from 0-2 would be viewed as weak.

Volatility

Stock volatility is a percentage that reveals whether a stock is a desirable purchase.  Investors look at the Volatility 12m to understand if a outfit has a low volatility percentage or not over the duration of a year.  The Volatility 12m of Franklin Wireless Corp. (OTCPK:FKWL) is 37.46.  This is determined by taking weekly log normal returns and standard deviation of the stock price over one year annualized.  The lower the number, a outfit is thought to have low volatility.  The Volatility 3m is a similar percentage calculated by the daily log normal returns and standard deviation of the stock price over 3 months.  The Volatility 3m of Franklin Wireless Corp. (OTCPK:FKWL) is 61.47.  The Volatility 6m is the same, except measured over the duration of six months.  The Volatility 6m is 59.07.

Return on Invested Capital (ROIC), ROIC Quality, ROIC 5 Year Average

The Return on Invested Capital (aka ROIC) for Franklin Wireless Corp. (OTCPK:FKWL) is -0.12. The Return on Invested Capital is a ratio that determines whether a outfit is profitable or not. It tells investors how well a outfit is turning their capital into profits. The ROIC is determined by dividing the net operating profit (or EBIT) by the employed capital. The employed capital is determined by subrating current liabilities from total assets. Similarly, the Return on Invested Capital Quality ratio is a resource in evaluating the quality of a outfit’s ROIC over the duration of five years. The ROIC Quality of Franklin Wireless Corp. (OTCPK:FKWL) is 0.28. This is determined by dividing the five year average ROIC by the Standard Deviation of the 5 year ROIC. The ROIC 5 year average is determined using the five year average EBIT, five year average (net working capital and net fixed assets). The ROIC 5 year average of Franklin Wireless Corp. (OTCPK:FKWL) is -0.03.

There are many alternate tools to understand whether a outfit is profitable or not.  One of the most leading ratios is the “Return on Assets” (aka ROA).  This score reveals how profitable a outfit is relative to its total assets.  The Return on Assets for Franklin Wireless Corp. (OTCPK:FKWL) is -0.06.  This number is determined by dividing net income after tax by the outfit’s total assets.  A outfit that manages their assets well will have a higher return, while a outfit that manages their assets poorly will have a lower return.

It may be crucial for many investors to decide the right time to buy or sell a stock. Veteran investors may seem like they have it all figured out, and amateurs may feel like they are swimming upstream. Seasoned traders may have spent many years monitoring market ebbs and flows. Knowing when to take profits or cut losses can be a tough skill to achieve. It might be difficult letting go of a well researched stock that hasn’t been performing well. Being able to exit a trade that has gone south can be a portfolio saver in the long run.

Leave a Comment