Value Composition in Focus For Ultra Petroleum Corp. (NasdaqGS:UPL) and TrueCar, Inc. (NasdaqGS:TRUE)

Checking in on some valuation rankings, Ultra Petroleum Corp. (NasdaqGS:UPL) has a Value Composite score of 16. 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 24. 

Some investors will scour the markets looking for cheap, quality stocks. These stocks can be attractive for investors looking to find a bargain that could turn into a big winner. Investors may be cautious when searching for these types of stocks. Often times, a stock will see a huge jump and then everyone will hop on the bandwagon to buy without checking into the fundamentals. Sometimes this strategy may work out, but in many cases, the stock has already made the run and become too expensive to add to the portfolio. Conducting diligent research and constantly adding to the individual’s overall market education level may help the investor sift through the sea of stocks and find those names that are really worth getting into.

Technicals at a Glance

In taking a look at some other notable technicals, Ultra Petroleum Corp. (NasdaqGS:UPL)’s ROIC is 0.187579. The ROIC 5 year average is 0.182651 and the ROIC Quality ratio is 0.619728. 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.

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 Ultra Petroleum Corp. (NasdaqGS:UPL) is 0.075736.  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.

Shareholder Yield
We also note that Ultra Petroleum Corp. (NasdaqGS:UPL) has a Shareholder Yield of -0.003769 and a Shareholder Yield (Mebane Faber) of 0.03181. 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.

Ultra Petroleum Corp. (NasdaqGS:UPL) has a current MF Rank of 2485. 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.

Price Index
We can now take aquick look at some historical stock price index data. Ultra Petroleum Corp. (NasdaqGS:UPL) presently has a 10 month price index of 0.18107. 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 0.16402, the 24 month is 0.21770, and the 36 month is 0.37897. Narrowing in a bit closer, the 5 month price index is 0.75243, the 3 month is 1.28099, and the 1 month is currently 1.08392.

The Piotroski F-Score is a scoring system between 1-9 that determines a firm’s financial strength.  The score helps determine if a company’s stock is valuable or not.  The Piotroski F-Score of Ultra Petroleum Corp. (NasdaqGS:UPL) is 5.  A score of nine indicates a high value stock, while a score of one indicates a low value stock.  The score is calculated by the return on assets (ROA), Cash flow return on assets (CFROA), change in return of assets, and quality of earnings.  It is also calculated by a change in gearing or leverage, liquidity, and change in shares in issue.  The score is also determined by change in gross margin and change in asset turnover.

When it comes to investing in the equity market, discipline can play a major role in achieving ones goals. A few bad moves can send the investor’s confidence spiraling. Acting purely on emotion can lead to impulsive decisions that may cause the losses to pile up. Creating a solid plan and following through with the plan can help investors stay on track and focus on the proper details. Markets are constantly going up and down and the investing ride can sometimes be a bumpy one. Being able to see the big picture and focus on the important data can help keep the investor tuned in to the right channel. Investors who expect to jump into the market and immediately start raking in the profits may find out fairly quickly that trading without a plan can be a recipe for defeat. 

The Value Composite One (VC1) is a method that investors use to determine a company’s value.  The Value Composite score of TrueCar, Inc. (NasdaqGS:TRUE) is 71.  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 TrueCar, Inc. (NasdaqGS:TRUE) is 73.

Investing in the stock market can be highly unpredictable. Veteran investors may have spent many years studying the market. At some point along the way, many investors may have had to make some tough decisions. Making the tough stock portfolio decisions can seem like a daunting task, especially if some wrong calls have been made in the past. Investors who are able to quickly learn from previous mistakes may be much better situated if they are able to keep from repeating those mistakes. When just starting out, investors may want to go slow and steady in order to focus on the simpler investing ideas first. 

In taking a look at some other notable technicals, TrueCar, Inc. (NasdaqGS:TRUE)’s ROIC is -0.207027. The ROIC 5 year average is -0.365201 and the ROIC Quality ratio is -1.107338. 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 TrueCar, Inc. (NasdaqGS:TRUE) is 60.00000.  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 TrueCar, Inc. (NasdaqGS:TRUE) is -0.017174. 

Shareholder Yield
We also note that TrueCar, Inc. (NasdaqGS:TRUE) has a Shareholder Yield of -0.036285 and a Shareholder Yield (Mebane Faber) of -0.03441. 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
TrueCar, Inc. (NasdaqGS:TRUE) has a current MF Rank of 13591. 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. TrueCar, Inc. (NasdaqGS:TRUE) presently has a 10 month price index of 0.85642. 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 0.86919, the 24 month is 0.80824, and the 36 month is 1.28951. Narrowing in a bit closer, the 5 month price index is 0.97983, the 3 month is 0.82391, and the 1 month is currently 0.89631.

Equity market investors have plenty of information available to them when making stock selections. One of the toughest parts of selecting stocks may be figuring out which data to pay attention to. There are always swirling headlines in today’s financial news media. While some information may be highly important, other information may be much less important. Knowing exactly what to look for when doing stock research may take a lot of time to master. Investors who are able to stay highly focused may find it much easier to spot opportunities in the market. Once the investor knows what to look for, the stock market puzzle may be a bit easier to start piecing together.

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