What is the Magic Formula Telling Investors on NMC Health Plc (LSE:NMC), Treasury Wine Estates Limited (ASX:TWE)?

NMC Health Plc (LSE:NMC) has a current MF Rank of 6533. Developed by hedge fund manager Joel Greenblatt, the intention of the formula is to bring to light 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 may be doing a mid-year review of the portfolio. They may be considering to see what alterations must be made for the second half of the year. Maybe there were some great performers that don’t need much attention. There may also be some not so great performers that must be looked at a little bit closer. As the next earnings reports become available, investors will be able to scrutinize the numbers. Investors may be tracking sell-side expert projections heading into earnings. Analysts will Often times update their numbers as the earnings date techniques.

Free Cash Flow Growth (FCF Growth) is the free cash flow of the current year minus the free cash flow from the previous year, divided by last year’s free cash flow.  The FCF Growth of NMC Health Plc (LSE:NMC) is 1.16.  Free cash flow (FCF) is the cash produced by the outfit minus capital expenditure.  This cash is what a outfit uses to meet its financial obligations, such as making payments on debt or to pay out dividends.  

The Free Cash Flow Score (FCF Score) is a useful gadget in calculating the free cash flow growth with free cash flow stability – this gives investors the overall quality of the free cash flow.  The FCF Score of NMC Health Plc (LSE:NMC) is 1.42.  Experts say the higher the value, the better, as it means that the free cash flow is high, or the variability of free cash flow is low or both.

The Return on Invested Capital (aka ROIC) for NMC Health Plc (LSE:NMC) is 0.26.  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 gadget in evaluating the quality of a outfit’s ROIC over the period of five years.  The ROIC Quality of NMC Health Plc (LSE:NMC) is 3.31.  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 NMC Health Plc (LSE:NMC) is 0.20.

Shareholder Yield

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 NMC Health Plc (LSE:NMC) is -0.02.  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 boost the shareholder value, too.  Another way to understand the effectiveness of a outfit’s distributions is by considering at the Shareholder yield (Mebane Faber).  The Shareholder Yield (Mebane Faber) of NMC Health Plc LSE:NMC is -0.11.  This number is determined by considering at the measure of the dividend yield plus percentage of sales repurchased and net debt repaid yield.

The Value Composite One (VC1) is a method that investors use to understand a outfit’s value.  The VC1 of NMC Health Plc (LSE:NMC) is 68.  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 NMC Health Plc (LSE:NMC) is 69.

Investors may be interested in studying the Gross Margin score on shares of NMC Health Plc (LSE:NMC). The name presently has a score of 36. 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.

ERP5 Rank

The ERP5 Rank is an investment gadget that analysts use to detect undervalued companies. The ERP5 looks at the Price to Book ratio, Earnings Yield, ROIC and 5 year average ROIC. The ERP5 of NMC Health Plc (LSE:NMC) is 8356. The lower the ERP5 rank, the more undervalued a outfit is thought to be.

C-Score – Montier

NMC Health Plc (LSE:NMC) presently has a Montier C-score of 5. This indicator was developed by James Montier in an attempt to identify firms that were cooking the books in order to appear better on paper. The score ranges from zero to six where a 0 would indicate no evidence of book cooking, and a 6 would indicate a high likelihood. A C-score of -1 would indicate that there is not enough information available to add up the score. Montier used six inputs in the calculation. These inputs included a growing difference between net income and cash flow from operations, increasing receivable days, growing day’s sales of inventory, increasing nonstandard current assets, decrease in depreciation relative to gross property plant and equipment, and high total asset growth.

F Score

At the time of writing, NMC Health Plc (LSE:NMC) has a Piotroski F-Score of 4. The F-Score may assist detect companies with strengthening balance sheets. The score may also be used to bring to light the weak performers. Joseph Piotroski developed the F-Score which employs nine nonstandard 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 nonstandard end, a stock with a score from 0-2 would be viewed as weak.

Investors are always striving to unveil the next great stock to add to the portfolio. Finding that next winner may involve some dedicated homework and perseverance. Sorting through the immense amount of information about public companies can be a chore. Many smooth investors will attack the equity markets from many various angles. This may encompass keeping close tabs on fundamental and technical data. This may also include monitoring expert opinions and tracking institutional transactions.

The MF Rank developed by hedge fund manager Joel Greenblatt, is intended bring to light 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. Treasury Wine Estates Limited (ASX:TWE) has a current MF Rank of 6765.

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Investors may be considering for solid stocks to add to the portfolio. Sometimes, investors may pick to go against the grain and try something that nobody else is doing. This typically comes with plenty of time and homework examining those appealing stocks. Digging into the fundamentals as well as tracking technical levels can assist separate the winners from the losers. Investors who are able to keep the imperative temperament may be able to cope with market volatility and get positioned to take advantage of any opportunity that presents itself. 

Free Cash Flow Growth (FCF Growth) is the free cash flow of the current year minus the free cash flow from the previous year, divided by last year’s free cash flow.  The FCF Growth of Treasury Wine Estates Limited (ASX:TWE) is -0.65.  Free cash flow (FCF) is the cash produced by the outfit minus capital expenditure.  This cash is what a outfit uses to meet its financial obligations, such as making payments on debt or to pay out dividends.  The Free Cash Flow Score (FCF Score) is a useful gadget in calculating the free cash flow growth with free cash flow stability – this gives investors the overall quality of the free cash flow.  The FCF Score of Treasury Wine Estates Limited (ASX:TWE) is 0.06.  Experts say the higher the value, the better, as it means that the free cash flow is high, or the variability of free cash flow is low or both.

Investors may be interested in studying the Gross Margin score on shares of Treasury Wine Estates Limited (ASX:TWE). The name presently has a score of 10. 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 Return on Invested Capital (aka ROIC) for Treasury Wine Estates Limited (ASX:TWE) is 0.15.  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 gadget in evaluating the quality of a outfit’s ROIC over the period of five years.  The ROIC Quality of Treasury Wine Estates Limited (ASX:TWE) is 1.46.  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 Treasury Wine Estates Limited (ASX:TWE) is 0.08.

Shareholder Yield

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 Treasury Wine Estates Limited (ASX:TWE) 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 boost the shareholder value, too.  Another way to understand the effectiveness of a outfit’s distributions is by considering at the Shareholder yield (Mebane Faber).  The Shareholder Yield (Mebane Faber) of Treasury Wine Estates Limited ASX:TWE is 0.00.  This number is determined by considering at the measure of the dividend yield plus percentage of sales repurchased and net debt repaid yield.

The Value Composite One (VC1) is a method that investors use to understand a outfit’s value.  The VC1 of Treasury Wine Estates Limited (ASX:TWE) is 60.  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 Treasury Wine Estates Limited (ASX:TWE) is 48.

Key Ratios

Treasury Wine Estates Limited (ASX:TWE) right now has a current ratio of 2.15. The current ratio, also known as the working capital ratio, is a liquidity ratio that displays the proportion of current assets of a business relative to the current liabilities. The ratio is simply determined by dividing current liabilities by current assets. The ratio may be used to provide an idea of the ability of a certain outfit to pay back its liabilities with assets. Typically, the higher the current ratio the better, as the outfit may be more capable of paying back its obligations.

Treasury Wine Estates Limited (ASX:TWE)’s Leverage Ratio was recently noted as 0.16. This ratio is determined by dividing total debt by total assets plus total assets previous year, divided by two. The leverage of a outfit is relative to the amount of debt on the balance sheet. This ratio is Often times viewed as one quantify of the financial health of a outfit.

The Price to book ratio is the current equity price of a outfit divided by the book value per share.  The Price to Book ratio for Treasury Wine Estates Limited ASX:TWE is 2.95.  A lower price to book ratio implies that the stock might be undervalued.  Similarly, Price to cash flow ratio is another useful ratio in determining a outfit’s value.  The Price to Cash Flow for Treasury Wine Estates Limited (ASX:TWE) is 34.89.  This ratio is determined by dividing the market value of a outfit by cash from operating activities.  Additionally, the price to earnings ratio is another crowd-pleasing way for analysts and investors to understand a outfit’s profitability.  The price to earnings ratio for Treasury Wine Estates Limited (ASX:TWE) is 28.56. This ratio is found by taking the current equity price and dividing by EPS.

Investors Often times should look into make decisions on what to do with stocks that have unperformed. Maybe things didn’t pan out the right way, even after combing through the numbers. Sometimes it may be challenging to let go of a stock that isn’t up to par. Knowing when to cut a loser from the portfolio can be a helpful skill for the individual investor. On the flip side, investors may should look into decide whether to sell a winner. There may be occasions when a stock goes through the roof without any notice. The tricky part may be figuring out whether to cash in, or keep riding the wave. Heading into the next few quarters, investors will be trying to make sure they have all the bases covered. 

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