Earnings Yield is calculated by taking the operating income or earnings before interest and taxes (EBIT) and dividing it by the Enterprise Value of the company. The Earnings Yield for China Suntien Green Energy Corporation Limited (SEHK:956) stands at 0.067468. Earnings Yield helps investors measure the return on investment for a given company. Similarly, the Earnings Yield Five Year Average is the five year average operating income or EBIT divided by the current enterprise value. The Earnings Yield Five Year average for China Suntien Green Energy Corporation Limited (SEHK:956) is 0.038981. Further, the Earnings to Price yield of China Suntien Green Energy Corporation Limited SEHK:956 is 0.162656. This is calculated by taking the earnings per share and dividing it by the last closing share price. This is one of the most popular methods investors use to evaluate a company’s financial performance.
Investors might be trying to step up their game in order to play a more active role with their investments. Investors who keep a close watch on what is happening with their money may be putting themselves in a good spot to attain financial success in the markets. Being knowledgeable and comfortable about investments may be a great way to be certain that the hard earned money is working for the individual. Wise investors typically have a detailed plan that entails realistic expectations about profits in the stock market. There will always be risks dealing with the equity market, but hoping to get lucky may lead to severe losses and other pitfalls down the road. Everyone may have a different risk threshold when it comes to investing. It may be highly important to evaluate one’s own overall financial situation before going full throttle into the markets.
Quant Signals – Value Composite, C- Score, MF Rank, M-Score, ERP5
The Value Composite One (VC1) is a method that investors use to determine a company’s value. The VC1 of China Suntien Green Energy Corporation Limited (SEHK:956) is 7. 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 China Suntien Green Energy Corporation Limited (SEHK:956) is 5.
China Suntien Green Energy Corporation Limited (SEHK:956) currently has a Montier C-score of 1.00000. This indicator was developed by James Montier in an attempt to identify firms that were altering financial numbers 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 of something amiss. 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.
The MF Rank (aka the Magic Formula) is a formula that pinpoints a valuable company trading at a good price. The formula is calculated by looking at companies that have a high earnings yield as well as a high return on invested capital. The MF Rank of China Suntien Green Energy Corporation Limited (SEHK:956) is 7202. A company with a low rank is considered a good company to invest in. The Magic Formula was introduced in a book written by Joel Greenblatt, entitled, “The Little Book that Beats the Market”.
China Suntien Green Energy Corporation Limited (SEHK:956) has an M-score Beneish of -2.358262. This M-score model was developed by Messod Beneish in order to detect manipulation of financial statements. The score uses a combination of eight different variables. The specifics of the variables and formula can be found in the Beneish paper “The Detection of Earnings Manipulation”.
The last signal we’ll look at is the 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 China Suntien Green Energy Corporation Limited (SEHK:956) is 5618. The lower the ERP5 rank, the more undervalued a company is thought to be.
Volatility/PI
Stock volatility is a percentage that indicates whether a stock is a desirable purchase. Investors look at the Volatility 12m to determine if a company has a low volatility percentage or not over the course of a year. The Volatility 12m of China Suntien Green Energy Corporation Limited (SEHK:956) is 42.711400. This is calculated by taking weekly log normal returns and standard deviation of the share price over one year annualized. The lower the number, a company is thought to have low volatility. The Volatility 3m is a similar percentage determined by the daily log normal returns and standard deviation of the share price over 3 months. The Volatility 3m of China Suntien Green Energy Corporation Limited (SEHK:956) is 40.111900. The Volatility 6m is the same, except measured over the course of six months. The Volatility 6m is 44.978700.
We can now take a quick look at some historical stock price index data. China Suntien Green Energy Corporation Limited (SEHK:956) presently has a 10 month price index of 1.16218. 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 1.18652, the 24 month is 2.24853, and the 36 month is 1.85529. Narrowing in a bit closer, the 5 month price index is 0.98165, the 3 month is 0.94690, and the 1 month is currently 1.00469.
ROIC
The Return on Invested Capital (aka ROIC) for China Suntien Green Energy Corporation Limited (SEHK:956) is 0.071113. 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 China Suntien Green Energy Corporation Limited (SEHK:956) is 5.124563. 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 China Suntien Green Energy Corporation Limited (SEHK:956) is 0.060456.
Most investors are aware that not all stocks will be performing well at the same time. Different stocks may have alternate reactions to various economic factors, world events, and business happenings. When one stock is up, another one might be on the way down. Keeping the portfolio full of names from different sectors can help offset imbalances when one stock or sector may be performing poorly while another stock or sector is doing well. Diversification is typically recommended with all types of investing. Many factors may come into play when trying to pick the right stocks to own. Investors may want to figure out how much they are willing to risk, and what kinds of returns they are looking for. Many beginner investors may not be comfortable picking stocks on their own. Seeking professional advice may be one avenue to pursue, but it is usually a good idea to know exactly what holdings are in the portfolio at all times, as markets can move quickly and without notice.
The Earnings to Price yield of Arena Pharmaceuticals, Inc. (NasdaqGS:ARNA) is -0.055175. This is calculated by taking the earnings per share and dividing it by the last closing share price. This is one of the most popular methods investors use to evaluate a company’s financial performance. Earnings Yield is calculated by taking the operating income or earnings before interest and taxes (EBIT) and dividing it by the Enterprise Value of the company. The Earnings Yield for Arena Pharmaceuticals, Inc. NasdaqGS:ARNA is -0.071002. Earnings Yield helps investors measure the return on investment for a given company. Similarly, the Earnings Yield Five Year Average is the five year average operating income or EBIT divided by the current enterprise value. The Earnings Yield Five Year average for Arena Pharmaceuticals, Inc. (NasdaqGS:ARNA) is -0.038393.
Often times, investors are faced with challenging portfolio decisions. Maybe there are a few stocks that have outperformed expectations by a large margin. Investors may be hesitant to exit a position with the fear that the stock may have much more room to run. Investors may have to decide if the time is right to cash in and take some profits, or hold out for further gains. On the other end, investors may have a few duds in the portfolio. Cutting ties with certain underperformers can be a tough decision. It may be hard for an investor to sell a position that they thought for sure was going to pan out and provide gains. Being able to detach from a certain position may help ease the possibility of even more frustration later down the line if the stock doesn’t bounce back.
Quant Scores/Key Ratios
Now we’ll turn to some key quant data and ratios. The Current Ratio of Arena Pharmaceuticals, Inc. (NasdaqGS:ARNA) is 29.24. The Current Ratio is used by investors to determine whether a company can pay short term and long term debts. The current ratio looks at all the liquid and non-liquid assets compared to the company’s total current liabilities. A high current ratio indicates that the company might have trouble managing their working capital. A low current ratio (when the current liabilities are higher than the current assets) indicates that the company may have trouble paying their short term obligations.
Arena Pharmaceuticals, Inc. (NasdaqGS:ARNA)’s Leverage Ratio was recently noted as 0.124727. 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 Gross Margin Score is calculated by looking at the Gross Margin and the overall stability of the company over the course of 8 years. The score is a number between one and one hundred (1 being best and 100 being the worst). The Gross Margin Score of Arena Pharmaceuticals, Inc. (NasdaqGS:ARNA) is 70.00000. The more stable the company, the lower the score. If a company is less stable over the course of time, they will have a higher score.
At the time of writing, Arena Pharmaceuticals, Inc. (NasdaqGS:ARNA) has a Piotroski F-Score of 3. 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.
Arena Pharmaceuticals, Inc. (NasdaqGS:ARNA) has an M-score Beneish of -999.000000. This M-score model is a little known investment tool that was developed by Messod Beneish in order to detect manipulation of financial statements. The score uses a combination of eight different variables. The specifics of the variables and formula can be found in the Beneish paper “The Detection of Earnings Manipulation”.
The Value Composite One (VC1) is a method that investors use to determine a company’s value. The VC1 of Arena Pharmaceuticals, Inc. (NasdaqGS:ARNA) is 84. 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 Arena Pharmaceuticals, Inc. (NasdaqGS:ARNA) is 87.
The MF Rank (aka the Magic Formula) is a formula that pinpoints a valuable company trading at a good price. The formula is calculated by looking at companies that have a high earnings yield as well as a high return on invested capital. The MF Rank of Arena Pharmaceuticals, Inc. (NasdaqGS:ARNA) is 15411. A company with a low rank is considered a good company to invest in. The Magic Formula was introduced in a book written by Joel Greenblatt, entitled, “The Little Book that Beats the Market”.
Shifting gears, we can see that Arena Pharmaceuticals, Inc. (NasdaqGS:ARNA) has a Q.i. Value of 64.00000. The Q.i. Value ranks companies using four ratios. These ratios consist of EBITDA Yield, FCF Yield, Liquidity, and Earnings Yield. The purpose of the Q.i. Value is to help identify companies that are the most undervalued. Typically, the lower the value, the more undervalued the company tends to be.
Price Index/Share Movement
We can now take a quick look at some historical stock price index data. Arena Pharmaceuticals, Inc. (NasdaqGS:ARNA) presently has a 10 month price index of 1.04804. 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 1.38454, the 24 month is 2.90851, and the 36 month is 1.79083. Narrowing in a bit closer, the 5 month price index is 0.92054, the 3 month is 1.04885, and the 1 month is currently 1.07160.
Stock volatility is a percentage that indicates whether a stock is a desirable purchase. Investors look at the Volatility 12m to determine if a company has a low volatility percentage or not over the course of a year. The Volatility 12m of Arena Pharmaceuticals, Inc. (NasdaqGS:ARNA) is 63.816100. This is calculated by taking weekly log normal returns and standard deviation of the share price over one year annualized. The lower the number, a company is thought to have low volatility. The Volatility 3m is a similar percentage determined by the daily log normal returns and standard deviation of the share price over 3 months. The Volatility 3m of Arena Pharmaceuticals, Inc. (NasdaqGS:ARNA) is 67.623700. The Volatility 6m is the same, except measured over the course of six months. The Volatility 6m is 53.594300.
Traders might be paying extra attention to the technicals as they look to spot buying opportunities in the stock market. Because there are so many different strategies that traders can use, it may be difficult to pinpoint the correct avenue. New traders might choose to focus on one or two main indicators when just starting out. With time and experience, many traders will use a combination of various indicators when setting up their persona charts. It may be wise for traders to remember that what has worked for someone else in the past may not work for them in the future.