Adding Up the Valuation on Sugai Chemical Industry Co., Ltd. (TSE:4120)

Sugai Chemical Industry Co., Ltd. (TSE:4120) has an ERP5 rank of 8766. The ERP5 Rank is an investment tool that analysts use to discover undervalued companies.  It looks at the stock’s Price to Book ratio, Earnings Yield, ROIC and 5 year average ROIC.  The lower the rank, the more undervalued a company is considered to be.

A certain stock price rally by itself may not be sufficient evidence when making important investing decisions. To understand whether buying a stock at a higher price is justified by its long-term return potential, it is necessary to keep the finger on the pulse of underlying fundamentals. Following the latest data may help investors make the tough portfolio decisions. Investors may also want to set personal financial goals to help ensure that they are staying on the proper track. Financial professionals may be debating if global economic growth appears to be in a modest uptrend. This may have investors scrambling to study if developing markets are indeed growing with developed markets. This year could end up being the first year in a while where this has happened. The longer the bull market run, the tougher the investing decisions might be for the stock picker. 

FCF Yield 5yr Avg

The FCF Yield 5yr Average is calculated by taking the five year average free cash flow of a company, and dividing it by the current 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 average FCF of a company is determined by looking at the cash generated by operations of the company. The Free Cash Flow Yield 5 Year Average of Sugai Chemical Industry Co., Ltd. (TSE:4120) is 0.004952.

Technicals & Ratios

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 Sugai Chemical Industry Co., Ltd. (TSE:4120) is 0.109549.

The Earnings to Price yield of Sugai Chemical Industry Co., Ltd. (TSE:4120) is 0.043461.  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 Sugai Chemical Industry Co., Ltd. (TSE:4120) is 0.019727.  

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 Sugai Chemical Industry Co., Ltd. is 0.011458.

Q.i. Value

The Q.i. Value of Sugai Chemical Industry Co., Ltd. (TSE:4120) is 50. The Q.i. Value is another helpful tool in determining if a company is undervalued or not. The Q.i. Value is calculated using the following ratios: EBITDA Yield, Earnings Yield, FCF Yield, and Liquidity. The lower the Q.i. value, the more undervalued the company is thought to be.

Quant Scores

The M-Score, conceived by accounting professor Messod Beneish, is a model for detecting whether a company has manipulated their earnings numbers or not. Sugai Chemical Industry Co., Ltd. (TSE:4120) has an M-Score of -999. 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.

The Value Composite One (VC1) is a method that investors use to determine a company’s value. The VC1 of Sugai Chemical Industry Co., Ltd. (TSE:4120) is 16. 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 Sugai Chemical Industry Co., Ltd. (TSE:4120) is 20.

Investors may be interested in viewing the Gross Margin score on shares of Sugai Chemical Industry Co., Ltd. (TSE:4120). The name currently has a score of 4. 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.

At the time of writing, Sugai Chemical Industry Co., Ltd. (TSE:4120) has a Piotroski F-Score of 6. 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.

Investors may be analyzing the portfolio as we continue to move closer to the end of the year. Studying first half results may assist to identify trades that panned out, and those that didn’t. Keeping tabs on pervious trade outcomes may be a good way to accurately see what actually happened. It may be necessary to dig a little deeper to try and figure out why certain trades worked, and why others did not. Many investors may feel like they have missed the boat, and they may be wondering if stocks will see increased momentum closing out the year. Attaining comprehensive knowledge of the markets may take years to truly figure out. Combining technical analysis and tracking fundamentals may help the investor see the complete picture and develop confidence for trading into the future. Being able to sift through the endless sea of information may take some perseverance and extreme focus.

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