A Look at the valuation of Public Joint Stock Company Mining and Metallurgical Company Norilsk Nickel (MNOD.L) as 1866

Public Joint Stock Company Mining and Metallurgical Company Norilsk Nickel (MNOD.L) of the Materials sector has an ERP5 rank of 1866. 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 lower the ERP5 rank, the more undervalued a company is thought to be.

As earnings season kicks into high gear, investors may be analyzing the numbers and trying to decide what to do next. Investors may be choosing to buy companies that have a proven track record of solid earnings growth. Other investors may be looking to spot the diamonds in the rough that haven’t necessarily broken out yet. It may be wise to research companies that continually string together superior quarters. One great quarter or one horrible quarter may not provide enough information to justify either a buy or a sell. Many investors will look deeper into the numbers for companies that produce much wider surprise factors than expected. This may occur on either end of the dial with a beat or a miss. Earnings reports also have the ability to cause severe stock price fluctuations. Some traders will look to catch some profits while others may stay on the bench until the dust has cleared.

EBITDA/EV

EBITDA/EV is similar to Earnings Yield, but here we use Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) as Nominator). By doing this, we can compare companies with a different capital structure and capital expenditures. This way it gives a much better idea of the value of a company compared to the popular P/E ratio. You can think of it as the taking all the revenue and subtracting the costs that solely go into running the business. The downside of EBITDA is that it can be abused by companies declaring as “one-off” costs things that should really be considered normal costs. We use the EBITDA of the last 12 months. Public Joint Stock Company Mining and Metallurgical Company Norilsk Nickel (MNOD.L) has an EBITDA/EV of 0.154591.

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 Public Joint Stock Company Mining and Metallurgical Company Norilsk Nickel (MNOD.L) is 0.135611.  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 Public Joint Stock Company Mining and Metallurgical Company Norilsk Nickel (MNOD.L) is 0.102673.

FCF Yield 5yr Avg

The FCF Yield 5yr Average is calculated by taking the five year average free cash flow of a company, and dividing it by the current 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 average FCF of a company is determined by looking at the cash generated by operations of the company. The Free Cash Flow Yield 5 Year Average of Public Joint Stock Company Mining and Metallurgical Company Norilsk Nickel (MNOD.L) is 0.066634.

Price to book, Price to cash flow, Price to earnings

Price to cash flow ratio is another helpful ratio in determining a company’s value. The Price to Cash Flow for Public Joint Stock Company Mining and Metallurgical Company Norilsk Nickel (MNOD.L) is 5.105872. 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 Public Joint Stock Company Mining and Metallurgical Company Norilsk Nickel (MNOD.L) is 10.74359. This ratio is found by taking the current share price and dividing by earnings per share.  The price to sales stands at 2.840824.

Value Comp 1 / Value Comp 2

The Value Composite One (VC1) is a method that investors use to determine a company’s value. The VC1 of Public Joint Stock Company Mining and Metallurgical Company Norilsk Nickel (MNOD.L) is 23. 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 Public Joint Stock Company Mining and Metallurgical Company Norilsk Nickel (MNOD.L) is 21.  VC3 is the combination of the following factors:

Price-to-Book
Price-to-Earnings
Price-to-Sales
EBITDA/EV
Price-to-Cash flow
Buyback Yield

As with the VC1 and VC2, companies are put into groups from 1 to 100 for each ratio and the individual scores are summed up. This total score is then put into groups again from 1 to 100. 1 is cheap, 100 is expensive. Public Joint Stock Company Mining and Metallurgical Company Norilsk Nickel (MNOD.L) has a VC3 of 17.

Volatility 12 m, 6m, 3m

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 Public Joint Stock Company Mining and Metallurgical Company Norilsk Nickel (MNOD.L) is 28.0079. 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 Public Joint Stock Company Mining and Metallurgical Company Norilsk Nickel (MNOD.L) is 20.7082. The Volatility 6m is the same, except measured over the course of six months. The Volatility 6m is 21.3533.

MF Rank

The MF Rank (aka the Magic Formula) is a formula that pinpoints a valuable company trading at a good price. The formula is calculated by looking at companies that have a high earnings yield as well as a high return on invested capital. The MF Rank of Public Joint Stock Company Mining and Metallurgical Company Norilsk Nickel (MNOD.L) is 588. A company with a low rank is considered a good company to invest in. The Magic Formula was introduced in a book written by Joel Greenblatt, entitled, “The Little Book that Beats the Market”.

Piotroski F-Score

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 Public Joint Stock Company Mining and Metallurgical Company Norilsk Nickel (MNOD.L) is 8. 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.

Return on Assets

There are many different tools to determine whether a company is profitable or not. One of the most popular ratios is the “Return on Assets” (aka ROA). This score indicates how profitable a company is relative to its total assets. The Return on Assets for Public Joint Stock Company Mining and Metallurgical Company Norilsk Nickel (MNOD.L) is 0.185452. This number is calculated by dividing net income after tax by the company’s total assets. A company that manages their assets well will have a higher return, while a company that manages their assets poorly will have a lower return.

With the stock market still reaching new heights, investors may be wondering how long the good times will keep rolling. It may be tempting to sell some winners to lock in profits at these levels. Of course, nobody can predict how long the market run will continue, but having a plan in place for the possibility of a downturn might be well worth it. Investors may want to regularly check the balance of the portfolio. There might be a few names in the portfolio that have recently taken off to the upside. This may disturb the equilibrium of the portfolio. Investors may need to be prepared to shuffle some profits into other sectors in order to stay in balance. Being able to ride out unexpected spikes or dips may involve keeping a regular watch on economic data and the overall stability of global markets. Investors who are able to avoid panic selling may be able to more efficiently analyze the data necessary to make informed decisions. Having a cool and collected approach may end up being one of the most important traits that the average investor could develop. Finding the proper methods to stay patient when the markets are in a frenzy might just help the investor ride out extended periods of flux and uncertainty.  .

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