China Shineway Pharmaceutical Group Limited (SEHK:2877) and Onward Holdings Co., Ltd. (TSE:8016)’s Book To Market Stands at Important Levels: Quant Update

Posted by on July 13, 2018 at 9:52 pm

China Shineway Pharmaceutical Group Limited (SEHK:2877) has a Q.i. Value of 22.00000. 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. The Q.i. Value ranks companies using four ratios. These ratios consist of EBITDA Yield, FCF Yield, Liquidity, and Earnings Yield. 

Piotroski F-Score

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 China Shineway Pharmaceutical Group Limited (SEHK:2877) is 6. 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.

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 China Shineway Pharmaceutical Group Limited (SEHK:2877) is 32.00000. 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.

Price Index

The Price Index is a ratio that indicates the return of a share price over a past period. The price index of China Shineway Pharmaceutical Group Limited (SEHK:2877) for last month was 0.85488. 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 China Shineway Pharmaceutical Group Limited (SEHK:2877) is 1.87650.

Another useful indicator to assist in detmining rank is the ERP5 Rank. This 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 Shineway Pharmaceutical Group Limited (SEHK:2877) is 3166. The lower the ERP5 rank, the more undervalued a company is thought to be.

Looking further, 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 Shineway Pharmaceutical Group Limited (SEHK:2877) is 4827. 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”.

Earnings Yield

The Earnings to Price yield of China Shineway Pharmaceutical Group Limited SEHK:2877 is 0.045850. 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 China Shineway Pharmaceutical Group Limited SEHK:2877 is 0.060845. 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 Shineway Pharmaceutical Group Limited (SEHK:2877) is 0.101767.

ROIC

The Return on Invested Capital (aka ROIC) for China Shineway Pharmaceutical Group Limited (SEHK:2877) is 0.173878. 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 Shineway Pharmaceutical Group Limited (SEHK:2877) is 3.642317. 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 Shineway Pharmaceutical Group Limited (SEHK:2877) is 0.280634.

The Value Composite One (VC1) is a method that investors use to determine a company’s value. The VC1 of China Shineway Pharmaceutical Group Limited (SEHK:2877) is 43. 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 Shineway Pharmaceutical Group Limited (SEHK:2877) is 36.

ROIC
The Return on Invested Capital (aka ROIC) for Onward Holdings Co., Ltd. (TSE:8016) is 0.025627. 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 Onward Holdings Co., Ltd. (TSE:8016) is 6.084363. 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 Onward Holdings Co., Ltd. (TSE:8016) is 0.056316.

Another useful indicator to assist in detmining rank is the ERP5 Rank. This 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 Onward Holdings Co., Ltd. (TSE:8016) is 7748. The lower the ERP5 rank, the more undervalued a company is thought to be.

The Current Ratio of Onward Holdings Co., Ltd. (TSE:8016) is 1.13.  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 has little 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.

Looking further, 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 Onward Holdings Co., Ltd. (TSE:8016) is 10247. 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”.

Piotroski F-Score

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 Onward Holdings Co., Ltd. (TSE:8016) 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.

Gross Margin
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 Onward Holdings Co., Ltd. (TSE:8016) is 3.00000. 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.

Price Index

The Price Index is a ratio that indicates the return of a share price over a past period. The price index of Onward Holdings Co., Ltd. (TSE:8016) for last month was 0.77619. 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 Onward Holdings Co., Ltd. (TSE:8016) is 0.91688.

Shareholder Yield, Shareholder Yield (Mebane Faber)

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 Onward Holdings Co., Ltd. (TSE:8016) is 0.102525. 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 Onward Holdings Co., Ltd. TSE:8016 is 0.02982. This number is calculated by looking at the sum of the dividend yield plus percentage of sales repurchased and net debt repaid yield.

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 Onward Holdings Co., Ltd. TSE:8016 is 0.598642. 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 Onward Holdings Co., Ltd. (TSE:8016) is . 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 Onward Holdings Co., Ltd. (TSE:8016) is 21.140546. This ratio is found by taking the current share price and dividing by earnings per share.