MiMedx Group, Inc. (OTCPK:MDXG) and STEP Energy Services Ltd. (TSX:STEP)’s Return on Assets Place the Stock in the Hotbed

MiMedx Group, Inc. (OTCPK:MDXG) has a Piotroski F-Score of 6 at the time of writing. The F-Score may help discover companies with strengthening balance sheets. The score may also be used to spot the weak performers. 

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 MiMedx Group, Inc. (OTCPK:MDXG) is 1.920707. 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 MiMedx Group, Inc. (OTCPK:MDXG) is 1.830488. 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 Price Index is a ratio that indicates the return of a share price over a past period. The price index of MiMedx Group, Inc. (OTCPK:MDXG) for last month was 0.41071. 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 MiMedx Group, Inc. (OTCPK:MDXG) is 0.09871.

The EBITDA Yield is a great way to determine a company’s profitability. This number is calculated by dividing a company’s earnings before interest, taxes, depreciation and amortization by the company’s 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 EBITDA Yield for MiMedx Group, Inc. (OTCPK:MDXG) is 0.429538.

M-Score (Beneish)

The M-Score, conceived by accounting professor Messod Beneish, is a model for detecting whether a company has manipulated their earnings numbers or not. MiMedx Group, Inc. (OTCPK:MDXG) has an M-Score of -3.086052. The M-Score is based on 8 different variables: Days’ sales in receivables index, Gross Margin Index, Asset Quality Index, Sales Growth Index, Depreciation Index, Sales, General and Administrative expenses Index, Leverage Index and Total Accruals to Total Assets. A score higher than -1.78 is an indicator that the company might be manipulating their numbers.

Return on Assets

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 MiMedx Group, Inc. (OTCPK:MDXG) is 0.194501. 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.

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 MiMedx Group, Inc. (OTCPK:MDXG) is 208. The lower the ERP5 rank, the more undervalued a company is thought to be.

The Return on Invested Capital (aka ROIC) Score for STEP Energy Services Ltd. (TSX:STEP) is .  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. 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).  

STEP Energy Services Ltd. (TSX:STEP) has a Price to Book ratio of 0.283419. This ratio is calculated by dividing the current share price by the book value per share. Investors may use Price to Book to display how the market portrays the value of a stock. Checking in on some other ratios, the company has a Price to Cash Flow ratio of 1.876470, and a current Price to Earnings ratio of 3.945554. The P/E ratio is one of the most common ratios used for figuring out whether a company is overvalued or undervalued.

Leverage Ratio

The Leverage Ratio of STEP Energy Services Ltd. (TSX:STEP) is 0.403451. Leverage ratio is the total debt of a company divided by total assets of the current and past year divided by two. Companies take on debt to finance their day to day operations. The leverage ratio can measure how much of a company’s capital comes from debt. With this ratio, investors can better estimate how well a company will be able to pay their long and short term financial obligations.

Watching some historical volatility numbers on shares of STEP Energy Services Ltd. (TSX:STEP), we can see that the 12 month volatility is presently 51.088500. The 6 month volatility is 70.302200, and the 3 month is spotted at 92.134500. Following volatility data can help measure how much the stock price has fluctuated over the specified time period. Although past volatility action may help project future stock volatility, it may also be vastly different when taking into account other factors that may be driving price action during the measured time period.

Scores
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 STEP Energy Services Ltd. (TSX:STEP) is 50.00000. 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.

Value
The Value Composite One (VC1) is a method that investors use to determine a company’s value. The VC1 of STEP Energy Services Ltd. (TSX:STEP) is 1. 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 STEP Energy Services Ltd. (TSX:STEP) is 4.

We can now take a quick look at some historical stock price index data. STEP Energy Services Ltd. (TSX:STEP) presently has a 10 month price index of 0.21800. 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 0.18197, the 24 month is 0.21910, and the 36 month is 0.21910. Narrowing in a bit closer, the 5 month price index is 0.20260, the 3 month is 0.37265, and the 1 month is currently 0.76491.