Barrick Gold Corporation (TSX:ABX) and Zimmer Biomet Holdings, Inc. (NYSE:ZBH) Stock Valuation in Focus

Barrick Gold Corporation (TSX:ABX) currently has a Value Composite score of 53.  Similarly, the Value Composite Two (VC2) is calculated with the same ratios, but adds the Shareholder Yield.  The Value Composite Two of Barrick Gold Corporation (TSX:ABX) is 48.

Market watchers diligently track the companies they think can do well to grow earnings. The goal is typically to discover stocks that are most likely to outperform in the future. Many investors like to keep tabs on sell-side analyst views. Following the direction estimates are trending may provide a deeper glimpse into the health of a company. Investors may need to follow a disciplined system which may help keep emotions in check when making investment decisions. On the other end, it may be necessary to craft a new strategy if the old system isn’t providing the types of expected returns. It can also become very time-consuming to keep up with shorter-term trends and events. Managing the short-term plan with the long-term plan can be difficult given the existing economic climate.

In taking a look at some other notable technicals, Barrick Gold Corporation (TSX:ABX)’s ROIC is 0.063684. The ROIC 5 year average is 0.110605 and the ROIC Quality ratio is 4.990749. ROIC is a profitability ratio that measures the return that an investment generates for those providing capital. ROIC helps show how efficient a firm is at turning capital into profits.

The Q.i. Value of Barrick Gold Corporation (TSX:ABX) is 35.00000.  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 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 Barrick Gold Corporation (TSX:ABX) is 0.013251. 

Shareholder Yield
We also note that Barrick Gold Corporation (TSX:ABX) has a Shareholder Yield of 0.012100 and a Shareholder Yield (Mebane Faber) of -0.46439. The first value is calculated by adding the dividend yield to the percentage of repurchased shares. The second value adds in the net debt repaid yield to the calculation. Shareholder yield has the ability to show how much money the firm is giving back to shareholders via a few different avenues. Companies may issue new shares and buy back their own shares. This may occur at the same time. Investors may also use shareholder yield to gauge a baseline rate of return.

MF Rank
Barrick Gold Corporation (TSX:ABX) has a current MF Rank of 8646. 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.

PI
We can now take aquick look at some historical stock price index data. Barrick Gold Corporation (TSX:ABX) presently has a 10 month price index of 1.03445. 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 0.94124, the 24 month is 0.71112, and the 36 month is 1.21344. Narrowing in a bit closer, the 5 month price index is 1.20816, the 3 month is 0.99071, and the 1 month is currently 0.88931.

Investors may be trying to find stocks that are building momentum. Finding these stocks may help bolster the portfolio going into the second half of the year. Investors often look to pounce on any opportunity in the stock market. Without properly being prepared, these opportunities may disappear quickly. Staying on top of fundamentals, technicals, and earnings, may help investors stay prepared. 

Taking a look at valuation rankings for Zimmer Biomet Holdings, Inc. (NYSE:ZBH), we see that the stock has a Value Composite score of 37. Adding a sixth ratio, shareholder yield, we can view the Value Composite 2 score which is currently sitting at 36.

Technicals

Many investors may strive to be in the stock market when the bulls are running and out of the market when the bears are in charge. Investors often use multiple strategies when setting up their portfolios. Some may rely solely on fundamental analysis, technical analysis, or a combination of both. Investing can be an extremely tough process. Individual investors often strive to gather and analyze vast amounts of information in order to make educated decisions. Often times, investors may have initial success in the stock market, and then things may turn sour. Confidence may be necessary to make the tougher decisions, but overconfidence may lead to an underperforming portfolio. Overconfidence may cause the investor to make poor decisions because they are relying too heavily on personal interpretations.

In taking a look at some other notable technicals, Zimmer Biomet Holdings, Inc. (NYSE:ZBH)’s ROIC is 0.345836. The ROIC 5 year average is 0.376155 and the ROIC Quality ratio is 3.246419. ROIC is a profitability ratio that measures the return that an investment generates for those providing capital. ROIC helps show how efficient a firm is at turning capital into profits.

We also note that Zimmer Biomet Holdings, Inc. (NYSE:ZBH) has a Shareholder Yield of 0.002690 and a Shareholder Yield (Mebane Faber) of 0.05831. The first value is calculated by adding the dividend yield to the percentage of repurchased shares. The second value adds in the net debt repaid yield to the calculation. Shareholder yield has the ability to show how much money the firm is giving back to shareholders via a few different avenues. Companies may issue new shares and buy back their own shares. This may occur at the same time. Investors may also use shareholder yield to gauge a baseline rate of return.

Zimmer Biomet Holdings, Inc. (NYSE:ZBH) has a current MF Rank of 4575. 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.

We can now take a quick look at some historical stock price index data. Zimmer Biomet Holdings, Inc. (NYSE:ZBH) presently has a 10 month price index of 0.97946. 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 0.83837, the 24 month is 0.93388, and the 36 month is 1.09531. Narrowing in a bit closer, the 5 month price index is 0.84041, the 3 month is 0.92011, and the 1 month is currently 1.02044.

The C-Score is a system developed by James Montier that helps determine whether a company is involved in falsifying their financial statements.  The C-Score is calculated by a variety of items, including a growing difference in net income verse cash flow, increasing days outstanding, growing days sales of inventory, increasing assets to sales, declines in depreciation, and high total asset growth.  The C-Score of Zimmer Biomet Holdings, Inc. (NYSE:ZBH) is 2.00000.  The score ranges on a scale of -1 to 6.  If the score is -1, then there is not enough information to determine the C-Score.  If the number is at zero (0) then there is no evidence of fraudulent book cooking, whereas a number of 6 indicates a high likelihood of fraudulent activity. The C-Score assists investors in assessing the likelihood of a company cheating in the books.

When dealing with the stock market, investors may seek to make trades that will limit regret and create a sense of pride. Often times, investors may be challenged with trying to figure out the proper time to sell winners or let go of losers. Of course, nobody wants to sell a winner if it looks like there may be more profits to be had. On the other hand, nobody wants to hold on to a loser for so long that severe losses pile up. Investors often need to assess their own appetite for risk. Some may be able to stomach large swings on a daily basis. Others may not be able to take the volatility when dealing with riskier investments. Risk decisions may be made on past outcomes, and investors who have experienced previous profits and gains may be more likely to take a bigger risk in the future. Those who have only seen substantial losses may be more risk adverse in the future. 

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