Checking on the Magic Formula Rank For Gentherm Incorporated (NasdaqGS:THRM), Hudbay Minerals Inc. (TSX:HBM)

Gentherm Incorporated (NasdaqGS:THRM) has a current MF Rank of 4873. 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.

Some traders may be using technical analysis to try and beat the stock market. There are many different indicators that traders have at their disposal. The sheer amount of indicators may leave the trader wondering which ones to use. Studying different technical indicators and signals may be worthwhile and educational, but the average investor may only end up focusing on a couple different indicators that actually work. Finding which indicators to follow and trade on may take some time and effort. Scoping out the proper signals and figuring out which ones tend to work the best may be on the minds of many traders. Trying to follow too many technical indicators might not be the best idea, and it may even cause more confusion. Once the signals have been chosen, traders may spend a lot of time back testing strategies before diving into the market.

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 Gentherm Incorporated (NasdaqGS:THRM) is 0.912022.  Free cash flow (FCF) is the cash produced by the company minus capital expenditure.  This cash is what a company 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 helpful tool 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 Gentherm Incorporated (NasdaqGS:THRM) is 1.047134.  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 Gentherm Incorporated (NasdaqGS:THRM) is 0.183820.  The Return on Invested Capital is a ratio that determines whether a company is profitable or not.  It tells investors how well a company is turning their capital into profits.  The ROIC is calculated by dividing the net operating profit (or EBIT) by the employed capital.  The employed capital is calculated by subrating current liabilities from total assets.  Similarly, the Return on Invested Capital Quality ratio is a tool in evaluating the quality of a company’s ROIC over the course of five years.  The ROIC Quality of Gentherm Incorporated (NasdaqGS:THRM) is 5.442675.  This is calculated by dividing the five year average ROIC by the Standard Deviation of the 5 year ROIC.  The ROIC 5 year average is calculated using the five year average EBIT, five year average (net working capital and net fixed assets).  The ROIC 5 year average of Gentherm Incorporated (NasdaqGS:THRM) is 0.283427.

Shareholder Yield

The Shareholder Yield is a way that investors can see how much money shareholders are receiving from a company through a combination of dividends, share repurchases and debt reduction.  The Shareholder Yield of Gentherm Incorporated (NasdaqGS:THRM) is 0.048854.  This percentage is calculated 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 increase the shareholder value, too.  Another way to determine the effectiveness of a company’s distributions is by looking at the Shareholder yield (Mebane Faber).  The Shareholder Yield (Mebane Faber) of Gentherm Incorporated NasdaqGS:THRM is 0.08822.  This number is calculated by looking at the sum 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 determine a company’s value.  The VC1 of Gentherm Incorporated (NasdaqGS:THRM) is 38.  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 Gentherm Incorporated (NasdaqGS:THRM) is 30.

Investors may be interested in viewing the Gross Margin score on shares of Gentherm Incorporated (NasdaqGS:THRM). The name currently has a score of 11.00000. 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.

ERP5 Rank

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 ERP5 of Gentherm Incorporated (NasdaqGS:THRM) is 5008. The lower the ERP5 rank, the more undervalued a company is thought to be.

C-Score – Montier

Gentherm Incorporated (NasdaqGS:THRM) currently has a Montier C-score of 2.00000. 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 calculate 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 other current assets, decrease in depreciation relative to gross property plant and equipment, and high total asset growth.

F Score

At the time of writing, Gentherm Incorporated (NasdaqGS:THRM) has a Piotroski F-Score of 7. 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.

Novice investors might be striving to create a trading strategy that produces results in the equity market. Once all the research is complete and the stocks are picked, they may need to decide what kind of time frame they will be working with in terms of buying and selling. Some investors will be making longer-term term plays, and others will be trying to make shorter-term moves. At some point, every investor will have to decide when to sell a winner and when to cut loose a loser. This can be one of the most difficult decisions to make. Investors may find it really hard to sell an underperforming stock when they still believe that it will turn around and move to profit. Waiting around for a turn around that may never come can lead to the undoing of a well crafted portfolio. Regularly staying on top of the markets may allow the investor to make educated buy or sell decisions when the time comes. This may involve following major economic data, studying company fundamentals, and checking in on historical price movement and trends. Investors who are able to keep their emotions in check might find themselves in a better position than those who let emotions get the best of them. 

The MF Rank developed by hedge fund manager Joel Greenblatt, is intended 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. Hudbay Minerals Inc. (TSX:HBM) has a current MF Rank of 5405.

Investors can employ various techniques in order to study stocks. Two of the most widely used techniques are fundamental and technical analysis. Fundamental analysis includes crunching the numbers for specific companies. This may involve reviewing the cash flow statement, income statement, and balance sheet. In essence, fundamental analysts are trying to figure out the company’s value. Once the value of a company is determined, the investor can then make investment decisions based on the research. Using this method, a stock that is trading underneath the intrinsic value may be considered a good pick. Technical traders typically hold the view that all the data they need to know about a stock can be discovered to using charts.

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 Hudbay Minerals Inc. (TSX:HBM) is -0.075333.  Free cash flow (FCF) is the cash produced by the company minus capital expenditure.  This cash is what a company 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 helpful tool 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 Hudbay Minerals Inc. (TSX:HBM) is 0.619533.  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 viewing the Gross Margin score on shares of Hudbay Minerals Inc. (TSX:HBM). The name currently has a score of 33.00000. 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.

The Return on Invested Capital (aka ROIC) for Hudbay Minerals Inc. (TSX:HBM) is 0.070547.  The Return on Invested Capital is a ratio that determines whether a company is profitable or not.  It tells investors how well a company is turning their capital into profits.  The ROIC is calculated by dividing the net operating profit (or EBIT) by the employed capital.  The employed capital is calculated by subrating current liabilities from total assets.  Similarly, the Return on Invested Capital Quality ratio is a tool in evaluating the quality of a company’s ROIC over the course of five years.  The ROIC Quality of Hudbay Minerals Inc. (TSX:HBM) is 3.733565.  This is calculated by dividing the five year average ROIC by the Standard Deviation of the 5 year ROIC.  The ROIC 5 year average is calculated using the five year average EBIT, five year average (net working capital and net fixed assets).  The ROIC 5 year average of Hudbay Minerals Inc. (TSX:HBM) is 0.022224.

Shareholder Yield

The Shareholder Yield is a way that investors can see how much money shareholders are receiving from a company through a combination of dividends, share repurchases and debt reduction.  The Shareholder Yield of Hudbay Minerals Inc. (TSX:HBM) is 0.002128.  This percentage is calculated 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 increase the shareholder value, too.  Another way to determine the effectiveness of a company’s distributions is by looking at the Shareholder yield (Mebane Faber).  The Shareholder Yield (Mebane Faber) of Hudbay Minerals Inc. TSX:HBM is 0.00575.  This number is calculated by looking at the sum 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 determine a company’s value.  The VC1 of Hudbay Minerals Inc. (TSX:HBM) is 13.  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 Hudbay Minerals Inc. (TSX:HBM) is 14.

Key Ratios

Hudbay Minerals Inc. (TSX:HBM) presently has a current ratio of 2.36. 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 calculated by dividing current liabilities by current assets. The ratio may be used to provide an idea of the ability of a certain company to pay back its liabilities with assets. Typically, the higher the current ratio the better, as the company may be more capable of paying back its obligations.

Hudbay Minerals Inc. (TSX:HBM)’s Leverage Ratio was recently noted as 0.224199. This ratio is calculated by dividing total debt by total assets plus total assets previous year, divided by two. The leverage of a company is relative to the amount of debt on the balance sheet. This ratio is often viewed as one measure of the financial health of a firm.

The Price to book ratio is the current share price of a company divided by the book value per share.  The Price to Book ratio for Hudbay Minerals Inc. TSX:HBM is 0.842876.  A lower price to book ratio indicates that the stock might be undervalued.  Similarly, Price to cash flow ratio is another helpful ratio in determining a company’s value.  The Price to Cash Flow for Hudbay Minerals Inc. (TSX:HBM) is 3.829627.  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 Hudbay Minerals Inc. (TSX:HBM) is 21.500721. This ratio is found by taking the current share price and dividing by earnings per share.

When compared to technical analysis, fundamental analysis typically uses a longer-term approach. Chartists may use a time horizon of days, hours, or even minutes. Fundamental analysis may track data going back many years. The difference in timeframe between the two can be seen with how each investing style may be used. Traders may only be looking to make quick trades and capitalize on short-term market movements. Longer-term investors may be looking to hold an investment for months or even years. Some investors will use a combination that studies the technicals and the fundamentals. Fundamentals may be used to identify which stock to buy, while viewing the technicals can be used to sort out the timing of the trade.

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