Northern Oil and Gas, Inc. (NOG): Time To Double Down? Value Composite in Focus As It Hits 61

Posted by Carlos Wienstein on November 29, 2018 at 11:14 pm

The Value Composite One (VC1) is a method that investors use to determine a company’s value.  The Value Composite score of Northern Oil and Gas, Inc. (NOG) is 61.  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 Northern Oil and Gas, Inc. is 74. The Value Composite Three score, taking into account buyback yield, is at 75.

Dealing with the ups and down of the stock market is something that most investors will encounter at some point. Everyone wants to feel that thrill of seeing that big winner soar, and nobody wants to see that loser keep sinking. Figuring out how to best approach the stock market can take up a lot of time and energy. There are many strategies that investors can use when purchasing stocks for the portfolio. Some of these strategies may be riskier than others. Determining a comfortable level of risk appetite may be highly important for the individual investor. It is important to remember that there are no guarantees in the stock market. New investors may have to learn that there is rarely any substitute for hard work and tireless research. Many investors jump in head first and find this out the hard way. Realizing that there is no guaranteed strategy for stock picking might help the investor stay focused and grounded while building up the portfolio. 

Watching some historical volatility numbers on shares of Northern Oil and Gas, Inc. (NOG), we can see that the 24 month volatility stands at 87.25, the 12 month volatility is presently 90.9767. The 6 month volatility is 65.0733, and the 3 month is spotted at 67.2348. 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. 

After a recent scan, we can see that Northern Oil and Gas, Inc. (NOG) has an Earnings Yield of 0.043985  and a five year earnings mark of 0.063689. 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 earnings yield to gauge a baseline rate of return.

The Return on Invested Capital (aka ROIC) for Northern Oil and Gas, Inc. (NOG) is 0.091396.  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 5 year mark of Northern Oil and Gas, Inc. (NOG) is 0.117715.  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).  

Ratios

The External Financing Ratio of Northern Oil and Gas, Inc. (NOG) is 0.41235.

This factor was introduced by Richard Tortoriello, a senior quantitative analyist for S&P Capital IQ. He authored a book on quantitative analysis: Quantitative Strategies for Achieving Alpha (2009, McGraw Hill). In this book, he identified the External Financing Ratio as a factor that is very good at predicting investment underperformance.

Formula:

External finance ratio=(Total Assets−Total Assets y-1−Cash Flow from Operations) divided by Total Assets


Gross Margin Score

Robert Novy-Marx, a professor at the University of Rochester, discovered that gross profitability – a quality factor – has as much power predicting stock returns as traditional value metrics. He found that while other quality measures had some predictive power, especially on small caps and in conjunction with value measures, gross profitability generates significant excess returns as a stand alone strategy, especially on large cap stocks.

Stock Market followers may also be following some quality ratios for Northern Oil and Gas, Inc. (NOG). Robert Novy-Marx, a professor at the university of Rochester, discovered that gross profitability – a quality factor – has as much power predicting stock returns as traditional value metrics. He found that while other quality measures had some predictive power, especially on small caps and in conjunction with value measures, gross profitability generates significant excess returns as a stand alone strategy, especially on large cap stocks.The Gross profitability for (NOG) is 0.296585.

Net Debt to Market Cap

This ratio gives a sense of how much debt a company has relative to its market value. Companies with high debt levels compared to their peers can be volatile. We calculate it as follows:

Net Debt to Market Cap=(Total Debt−Cash and ST Investments) divided by Market Cap


Northern Oil and Gas, Inc. (NOG) currently has a net debt to market cap ratio of 0.671564.

The Price Index is a ratio that indicates the return of a share price over a past period. The price index of Northern Oil and Gas, Inc. (NOG) for last month was 0.880399. 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 Northern Oil and Gas, Inc. (NOG) is 1.879433.

There are plenty of technical indicators that traders can choose to follow. With so many different signals to follow, traders may choose to focus on a small number of indicators to start. Many technical analysts will use a combination of different signals in order to help identify the best entry and exit points of a trade. Becoming a master at spotting trends and creating charts may seem impossible for the novice investor. Taking the time to fully understand the methods behind the indicators may help the trader with trying to sort everything out. Studying up on the theory behind some of the more popular indicators  may help the trader understand exactly what they are doing when setting up their charts.