Apple Inc. (NasdaqGS:AAPL) has a current MF Rank of 3542. 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.
Scanning the equity markets, it is quite obvious that there are plenty of stocks to choose from. This may make things a bit overwhelming for the beginner investor, but it should also be seen as a great opportunity. Of course, studying up on every single stock may be nearly impossible. Just focusing in on a few different stocks at a time that pique the interest may be the way to start. Investors are often bombarded with stock picking strategies and sure bet winners. Some of the information might end up being correct, but a lot of it may turn out to be nonsense. If investors decide to manage their own money, they may want to make sure that no stone is left unturned. Doing the proper amount of research can work wonders for the health of a portfolio over the course of time. Following a proven market guru may work for some, but it may leave others with many questions that have gone unanswered. What works for one investor may not work for another.
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 Apple Inc. (NasdaqGS:AAPL) is 0.245037. 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 Apple Inc. (NasdaqGS:AAPL) is 0.835381. 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 Apple Inc. (NasdaqGS:AAPL) is 0.263836. 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 Apple Inc. (NasdaqGS:AAPL) is 6.388425. 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 Apple Inc. (NasdaqGS:AAPL) is 0.288759.
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 Apple Inc. (NasdaqGS:AAPL) is 0.087328. 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 Apple Inc. NasdaqGS:AAPL is 0.09105. 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 Apple Inc. (NasdaqGS:AAPL) is 50. 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 Apple Inc. (NasdaqGS:AAPL) is 39.
Investors may be interested in viewing the Gross Margin score on shares of Apple Inc. (NasdaqGS:AAPL). The name currently has a score of 21.00000. 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 Apple Inc. (NasdaqGS:AAPL) is 5830. The lower the ERP5 rank, the more undervalued a company is thought to be.
C-Score – Montier
Apple Inc. (NasdaqGS:AAPL) 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.
F Score
At the time of writing, Apple Inc. (NasdaqGS:AAPL) has a Piotroski F-Score of 5. 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.
Scanning the equity markets, it is quite obvious that there are plenty of stocks to choose from. This may make things a bit overwhelming for the beginner investor, but it should also be seen as a great opportunity. Of course, studying up on every single stock may be nearly impossible. Just focusing in on a few different stocks at a time that pique the interest may be the way to start. Investors are often bombarded with stock picking strategies and sure bet winners. Some of the information might end up being correct, but a lot of it may turn out to be nonsense. If investors decide to manage their own money, they may want to make sure that no stone is left unturned. Doing the proper amount of research can work wonders for the health of a portfolio over the course of time. Following a proven market guru may work for some, but it may leave others with many questions that have gone unanswered. What works for one investor may not work for another.
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. Microsoft Corporation (NasdaqGS:MSFT) has a current MF Rank of 4927.
Traders are often looking for any little advantage that they can get when attempting to grab profits in the stock market. Traders might be closely watching insider buying and selling as well as what the successful fund managers are doing. Following the smart money can help investors get a grasp on the bigger picture of what is going on with certain equities. There is no shortage of information that the individual trader can get their hands on. Figuring out how to best put that information to work is an important part of any trading plan. With so much data to track, traders may need to decide which information they will use when making the big investing decisions. Pinpointing the next great trade could be just around the corner, but it may take some hard work and enhanced focus.
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 Microsoft Corporation (NasdaqGS:MSFT) is 0.190358. 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 Microsoft Corporation (NasdaqGS:MSFT) is 0.818185. 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 Microsoft Corporation (NasdaqGS:MSFT). The name currently has a score of 29.00000. 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 Microsoft Corporation (NasdaqGS:MSFT) is 0.381514. 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 Microsoft Corporation (NasdaqGS:MSFT) is 9.308984. 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 Microsoft Corporation (NasdaqGS:MSFT) is 0.333291.
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 Microsoft Corporation (NasdaqGS:MSFT) is 0.017977. 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 Microsoft Corporation NasdaqGS:MSFT is 0.02653. 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 Microsoft Corporation (NasdaqGS:MSFT) is 66. 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 Microsoft Corporation (NasdaqGS:MSFT) is 58.
Key Ratios
Microsoft Corporation (NasdaqGS:MSFT) presently has a current ratio of 2.97. 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.
Microsoft Corporation (NasdaqGS:MSFT)’s Leverage Ratio was recently noted as 0.310831. 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 Microsoft Corporation NasdaqGS:MSFT is 10.614081. 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 Microsoft Corporation (NasdaqGS:MSFT) is 21.200005. 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 Microsoft Corporation (NasdaqGS:MSFT) is 28.829361. This ratio is found by taking the current share price and dividing by earnings per share.
Investors will be closely watching which way market momentum will shift as we cruise into the back half of the year. Earnest investors will most likely be pouring over the latest earnings reports trying to spot buying opportunities. Many investors will pay especially close attention to companies that have posted large surprise factors over the past quarter. As the dust settles, investors might be monitoring stock price activity following the earning release in order to set up a plan for trading around the next earnings season.
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