Value Composition in Focus For Hormel Foods Corporation (NYSE:HRL) and T. Rowe Price Group, Inc. (NasdaqGS:TROW)

Checking in on some valuation rankings, Hormel Foods Corporation (NYSE:HRL) has a Value Composite score of 54. 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 50. 

Under recent market conditions, it may be quite difficult to be overly bearish. Most signs seem to be pointing in the right direction as investors keep concentrating on superior returns from the stock market. At this point in time, investors may have to make the tough decision whether to be fully invested in the stock market, or keep some cash handy on the sidelines. As we have seen, there will be a few days or weeks where market action may spur some second guessing, but the bulls seem they are still going to keep running. Many investors may be crafting plans for when the good times inevitably come to an end. Being prepared for market changes may help weather the storm when it comes. 

In taking a look at some other notable technicals, Hormel Foods Corporation (NYSE:HRL)’s ROIC is 0.375474. The ROIC 5 year average is 0.405192 and the ROIC Quality ratio is 12.607115. 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 Hormel Foods Corporation (NYSE:HRL) is 39.00000.  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 Hormel Foods Corporation (NYSE:HRL) is 0.029547. 

Shareholder Yield
We also note that Hormel Foods Corporation (NYSE:HRL) has a Shareholder Yield of 0.009288 and a Shareholder Yield (Mebane Faber) of -0.00625. 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
Hormel Foods Corporation (NYSE:HRL) has a current MF Rank of 4524. 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. Hormel Foods Corporation (NYSE:HRL) presently has a 10 month price index of 1.23653. 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 1.28587, the 24 month is 1.17560, and the 36 month is 1.01541. Narrowing in a bit closer, the 5 month price index is 1.05840, the 3 month is 0.95161, and the 1 month is currently 0.98988.

Investors may be doing a portfolio evaluation as we head into the second half of the calendar year. Assessing results from the first half may help identify what went right, and what went wrong. Many investors may have missed the charge, and they keep hoping for stocks to retreat to go on a buying spree. Gaining a solid grasp on the markets may take years to truly figure out. Combining technical analysis and tracking fundamentals may provide a large boost of confidence to the investor. Being able to sift through the countless chatter may take some perseverance and extreme focus. Creating a winning portfolio might only be a few sharp trades away.  

The Value Composite One (VC1) is a method that investors use to determine a company’s value.  The Value Composite score of T. Rowe Price Group, Inc. (NasdaqGS:TROW) is 44.  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 T. Rowe Price Group, Inc. (NasdaqGS:TROW) is 40.

Technicals

One of the most famous sayings in the stock market is “buy low, sell high”. This may seem like an oversimplified statement, but there are many novice investors who often do the complete opposite. Many investors may be looking too closely at stocks that have been on the rise, and they might not be checking on the underlying fundamental data. They may be hoping to ride the wave higher, but may end up shaking their heads. On the flip side, many investors may hold onto stocks for far too long after they have slipped drastically. Waiting for a bounce that may never come can cause frustration and plenty of second guessing. Successful investors are typically able to locate stocks that are undervalued at a certain price. This may take a lot of practice and dedication, but it may do wonders for the health of the portfolio.

In taking a look at some other notable technicals, T. Rowe Price Group, Inc. (NasdaqGS:TROW)’s ROIC is 0.371499. The ROIC 5 year average is 0.595950 and the ROIC Quality ratio is 13.769692. 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 T. Rowe Price Group, Inc. (NasdaqGS:TROW) has a Shareholder Yield of 0.019192 and a Shareholder Yield (Mebane Faber) of 0.06703. 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.

T. Rowe Price Group, Inc. (NasdaqGS:TROW) has a current MF Rank of 1496. 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. T. Rowe Price Group, Inc. (NasdaqGS:TROW) presently has a 10 month price index of 0.92117. 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 0.91402, the 24 month is 1.43145, and the 36 month is 1.52738. Narrowing in a bit closer, the 5 month price index is 0.89978, the 3 month is 1.02061, and the 1 month is currently 1.04949.

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 T. Rowe Price Group, Inc. (NasdaqGS:TROW) is 3.00000.  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.

Investors have the ability to approach the stock market from various angles. This may include using technical analysis, fundamental analysis, or a combination or the two. Investors watching the technical levels may be trying to chart patterns and discover trends in stock price movement. Investors tracking the fundamentals may be looking closely at many different factors. They may be focused on industry performance, earnings estimates, dividend payouts, and other factors. They might also be studying how the company is run, and trying to figure out the true value of the firm. Keeping track of all the data may seem overwhelming, but it may help give a needed boost to the portfolio. 

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