Computing the Quant Signals on Synopsys, Inc. (NasdaqGS:SNPS) Shares as Price to Cash Ratio Hits 45.316733

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 Synopsys, Inc. NasdaqGS:SNPS is 4.068610.  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 Synopsys, Inc. (NasdaqGS:SNPS) is 45.316733.  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 Synopsys, Inc. (NasdaqGS:SNPS) is 26.070667. This ratio is found by taking the current share price and dividing by earnings per share.

An important idea when dealing with technical analysis is that historical stock price movements tend to repeat. Technical analysis focuses on chart patterns with the goal of analyzing market movements and defining trends. Charting has been around for many years, and even older methods are considered to be relevant due to the nature of repeating patterns. Certain trends may be easier to spot than others. Technical analysts that spend vast amounts of studying charts and patterns may be more adept at spotting specific trends. Investors may want to employ multiple methods of trend spotting in order to get a more robust spectrum with which to work.

Watching some historical volatility numbers on shares of Synopsys, Inc. (NasdaqGS:SNPS), we can see that the 12 month volatility is presently 25.591500. The 6 month volatility is 30.063800, and the 3 month is spotted at 29.870900. 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. Synopsys, Inc. (NasdaqGS:SNPS) presently has a 10 month price index of 1.24673. 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 1.16414, the 24 month is 1.45083, and the 36 month is 2.30277. Narrowing in a bit closer, the 5 month price index is 1.03790, the 3 month is 1.18832, and the 1 month is currently 1.14690.

Valuation Ratios

Looking at some ROIC (Return on Invested Capital) numbers, Synopsys, Inc. (NasdaqGS:SNPS)’s ROIC is 0.410782. The ROIC 5 year average is 0.395167 and the ROIC Quality ratio is 18.815193. 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.  In terms of EBITDA Yield, Synopsys, Inc. (NasdaqGS:SNPS) currently has a value of 0.036038. This value is derived by dividing EBITDA by Enterprise Value.

The Price to Book ratio (Current share price / Book value per share) is a good valuation measure you can use to find undervalued investment ideas.  A low Price to Book could indicate that the shares are undervalued in their industry.  Generally speaking a P/B ratio under 1 is considered low and is best used in relation to asset-heavy firms.  At the time of writing Synopsys, Inc. (NasdaqGS:SNPS) has a price to book ratio of 4.068610.

Stock market reversals can occur at any given time. Sometimes, these corrections can provoke ominous forecasts from the investing community. With the market still riding high, it is important to note that market corrections can be common happenings in bull market runs. Investors may use these opportunities to buy some names at discount prices. As we move through earnings season, investors will be watching to see how companies have fared over the last quarter. Investors may want to examine sell-side analyst revisions in the weeks and days prior to the report. Investors and analysts will both be eagerly watching to see if the company can beat expectations.     

The Leverage Ratio of Synopsys, Inc. (NasdaqGS:SNPS) is 0.089847. Leverage ratio is the total debt of a company divided by total assets of the current and past year divided by two. Companies take on debt to finance their day to day operations. The leverage ratio can measure how much of a company’s capital comes from debt. With this ratio, investors can better estimate how well a company will be able to pay their long and short term financial obligations.

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 Synopsys, Inc. (NasdaqGS:SNPS) is 0.103143.  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.

The Value Composite One (VC1) is a method that investors use to determine a company’s value.  The VC1 of Synopsys, Inc. (NasdaqGS:SNPS) is 64.  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 Synopsys, Inc. (NasdaqGS:SNPS) is 66.

Individual investors have the tendency to migrate towards certain stock strategies that have been successful in the past. While following previous strategies may be profitable, investors have to be ready for sudden market changes. Most investors will rejoice when stocks in the portfolio catch a hot streak. On the opposite side, investors may become highly dejected when they experience a prolonged losing streak. Sometimes, previously successful strategies run their course and they no longer work. Investors may benefit greatly from being able to make adjustments when the market takes a turn for the worse. 

At the time of writing, Synopsys, Inc. (NasdaqGS:SNPS) 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.

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 Synopsys, Inc. NasdaqGS:SNPS is 4.068610.  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 Synopsys, Inc. (NasdaqGS:SNPS) is 45.316733.  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 Synopsys, Inc. (NasdaqGS:SNPS) is 26.070667. This ratio is found by taking the current share price and dividing by earnings per share.

Investing in the stock market has traditionally offered higher returns than other types of investments. With the higher potential for returns, there is also a higher risk factor. Investors typically need to address their own personal risk situation before jumping into the market. Figuring out risk appetite can help when choosing which types of stocks to buy. Some investors will decide that they want to take a chance on certain stocks that have the potential to outperform in the future. Other investors may opt to play it safe and build a portfolio with low risk, staple stocks. 

Receive News & Ratings Via Email - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings with MarketBeat.com's FREE daily email newsletter.