A Look at Valuation For Shares of Dominion Energy Midstream Partners, LP (NYSE:DM) as VC Reaches 46

The Value Composite 2 (VC2) is a ranking system that is calculated by using the price to book value, price to sales, EBITDA to EV, price to cash flow, price to earnings and shareholder yield. The Value Composite Two of Dominion Energy Midstream Partners, LP (NYSE:DM) is 46.   Similarly, the Value Composite One (VC1) is a method that investors use to determine a company’s value. The VC1 is calculated using the same metrics as VC2, but without taking into consideration shareholder yield. The VC1 of Dominion Energy Midstream Partners, LP (NYSE:DM) 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. 

Investors may be trying to gauge the current business cycle phase and how that could potentially impact the portfolio. Business cycles can be one way to analyze portfolio performance. Early on in the cycle, profits tend to grow rapidly, sales tend to improve, and activity rebounds. In the middle of a cycle, growth may be peaking, strong credit growth may still be seen, and policy may swing neutral. Toward the later stages, growth may be moderate, earnings may come under pressure, and credit may tighten. Heading into a period of recession, credit may completely dry up, profits may decline sharply, and there may be policy easing. Investors will often have to adjust portfolio holdings that reflect the current state of a business cycle.

Dominion Energy Midstream Partners, LP (NYSE:DM) has a current MF Rank of 9753. 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. Dominion Energy Midstream Partners, LP has a current ERP5 Rank of 9334. The ERP5 Rank may assist investors with spotting companies that are undervalued. This ranking uses four ratios. These ratios are Earnings Yield, ROIC, Price to Book, and 5 year average ROIC. When looking at the ERP5 ranking, it is generally considered the lower the value, the better.

Watching some historical volatility numbers on shares of Dominion Energy Midstream Partners, LP (NYSE:DM), we can see that the 12 month volatility is presently 42.920500. The 6 month volatility is 38.058000, and the 3 month is spotted at 24.939300. Following volatility data can help measure how much the stock price has fluctuated over the specified time period. Although past volatility action may help project future stock volatility, it may also be vastly different when taking into account other factors that may be driving price action during the measured time period. 

We can now take a quick look at some historical stock price index data. Dominion Energy Midstream Partners, LP (NYSE:DM) presently has a 10 month price index of 1.00995. The price index is calculated by dividing the current share price by the share price ten months ago. A ratio over one indicates an increase in share price over the period. A ratio lower than one shows that the price has decreased over that time period. Looking at some alternate time periods, the 12 month price index is 0.60873, the 24 month is 0.66311, and the 36 month is 0.82893. Narrowing in a bit closer, the 5 month price index is 1.12213, the 3 month is 0.97590, and the 1 month is currently 0.93989.

Valuation Scores

At the time of writing, Dominion Energy Midstream Partners, LP (NYSE:DM) has a Piotroski F-Score of 5. The F-Score may help discover companies with strengthening balance sheets. The score may also be used to spot the weak performers. Joseph Piotroski developed the F-Score which employs nine different variables based on the company 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 other end, a stock with a score from 0-2 would be viewed as weak.

Dominion Energy Midstream Partners, LP has an M-score Beneish of -999.000000. This M-score model was developed by Messod Beneish in order to detect manipulation of financial statements. The score uses a combination of eight different variables. The specifics of the variables and formula can be found in the Beneish paper “The Detection of Earnings Manipulation”.

Investors may be interested in viewing the Gross Margin score on shares of Dominion Energy Midstream Partners, LP (NYSE:DM). The name currently has a score of 50.00000. 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.

Shifting gears, we can see that Dominion Energy Midstream Partners, LP (NYSE:DM) has a Q.i. Value of 49.00000. 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 help identify companies that are the most undervalued. Typically, the lower the value, the more undervalued the company tends to be.

Stock market investing can indeed tug on an individual’s emotional strings. When the market becomes tumultuous, investors may be tempted to act impulsively, or they may freeze and not act at all. Being prepared for various scenarios may help the investor better deal with the market when the time comes. Staying disciplined with portfolio rebalancing and asset allocation may be a big help for the individual investor. Investors who constantly try to outguess the market and chase winners may eventually find themselves swimming upstream. Staying the course and keeping a logical perspective may assist the investor with making the tricky portfolio decisions when necessary. 

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