Highland Gold Mining Limited (AIM:HGM) Shares See Their Value Composition Score Touch 12

Checking in on some valuation rankings, Highland Gold Mining Limited (AIM:HGM) has a Value Composite score of 12. Developed by James O’Shaughnessy, the VC score uses five valuation ratios. These ratios are price to earnings, price to cash flow, EBITDA to EV, price to book value, and price to sales. The VC is displayed as a number between 1 and 100. In general, a company with a score closer to 0 would be seen as undervalued, and a score closer to 100 would indicate an overvalued company. Adding a sixth ratio, shareholder yield, we can view the Value Composite 2 score which is currently sitting at 7. 

Stock market investors typically have to deal with the risk element when making decisions about specific holdings. There will always be a trade-off between risk and reward, and this is quite evident in the equity market. In general, the more that someone is willing to risk, the higher the potential gains. Investors might need to be willing to identify their risk levels before attempting to jump into the fray. Some investors will choose to play it safe while others will opt to swing for the fences. Managing risk becomes increasingly more important when economic conditions are cloudy. Accumulating the most amount of understanding and relevant information about a company may be a good place to start. Studying a company’s position in the current market may help with understanding how the company has set themselves up for future growth.

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 Highland Gold Mining Limited (AIM:HGM) is 0.029599. 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 Highland Gold Mining Limited (AIM:HGM) is 0.680956. 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 Price Index is a ratio that indicates the return of a share price over a past period. The price index of Highland Gold Mining Limited (AIM:HGM) for last month was 1.04849. This is calculated by taking the current share price and dividing by the share price one month ago. If the ratio is greater than 1, then that means there has been an increase in price over the month. If the ratio is less than 1, then we can determine that there has been a decrease in price. Similarly, investors look up the share price over 12 month periods. The Price Index 12m for Highland Gold Mining Limited (AIM:HGM) is 1.03793.

The EBITDA Yield is a great way to determine a company’s profitability.  This number is calculated by dividing a company’s earnings before interest, taxes, depreciation and amortization by the company’s 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 EBITDA Yield for Highland Gold Mining Limited (AIM:HGM) is 0.188758. 

C-Score Montier

Highland Gold Mining Limited (AIM:HGM) currently has a Montier C-score of 1.00000. 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.

After a recent scan, we can see that Highland Gold Mining Limited (AIM:HGM) has a Shareholder Yield of 0.070604 and a Shareholder Yield (Mebane Faber) of 0.08674. 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.

Highland Gold Mining Limited (AIM:HGM) has a current MF Rank of 3809. 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.

The M-Score, conceived by accounting professor Messod Beneish, is a model for detecting whether a company has manipulated their earnings numbers or not. Highland Gold Mining Limited (AIM:HGM) has an M-Score of -2.947656.  The M-Score is based on 8 different variables: Days’ sales in receivables index, Gross Margin Index, Asset Quality Index, Sales Growth Index, Depreciation Index, Sales, General and Administrative expenses Index, Leverage Index and Total Accruals to Total Assets.  A score higher than -1.78 is an indicator that the company might be manipulating their numbers.

Some of the best financial predictions are formed by using a variety of financial tools. The Price Range 52 Weeks is one of the tools that investors use to determine the lowest and highest price at which a stock has traded in the previous 52 weeks.  The Price Range of Highland Gold Mining Limited (AIM:HGM) over the past 52 weeks is 0.829000.  The 52-week range can be found in the stock’s quote summary.

Investors might be taking a closer look at the portfolio after recent market action. Some financial insiders may be ready to usher in the bears and projecting the end of the bull run. While this may or may not be the case, investors need to be ready for any scenario. The time may have come to cash out some winners and cut the losers. A portfolio rebalance may be necessary in order to secure profits as we head into the latter half of the year. Keeping a diversified portfolio may entail adding some different sectors and even venturing into foreign markets. Investors will be tracking company earnings as we roll into the next round of reports. It may be a bit easier to make sense of future stock market prospects after seeing how many companies hit or miss their marks. 

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