Sizing up the Valuation According to Quant for Genus plc (LSE:GNS)

Genus plc (LSE:GNS) has an ERP5 rank of 13674. 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.

Investors often closely follow fundamental and technical data. Even with all the evidence, it can be tough to determine if the economy and the markets are preparing for a whole new breakout run. With the recent trend resulting in a series of new all-time record highs, investors will have to put the pieces together to try and gauge how long the second longest bull market in history will continue. Some professionals are still wondering if the next recession is looming, and if a bear market is right around the corner. Investors commonly strive to locate the highest probability of success. The next goal may be to capitalize on what could become the most interesting part of the record bull market. Investors will most likely be concentrating on what has proven to work in the past, which may offer a better idea as to how successful the strategies will be heading into the second half of the year and beyond. 

Q.i. Value

The Q.i. Value of Genus plc (LSE:GNS) is 59. 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.

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 Genus plc (LSE:GNS) is -0.006556.

The Earnings to Price yield of Genus plc (LSE:GNS) is 0.042813.  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 Genus plc LSE:GNS is -0.019729.  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 Genus plc is -0.000381.

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 Genus plc (LSE:GNS) is 0.013994.

Price to book, Price to cash flow, Price to earnings

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 Genus plc LSE:GNS is 3.722873. 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 Genus plc (LSE:GNS) is 38.429955. 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 Genus plc (LSE:GNS) is 23.357128. This ratio is found by taking the current share price and dividing by earnings per share.

Value Comp 1 / Value Comp 2

The Value Composite One (VC1) is a method that investors use to determine a company’s value. The VC1 of Genus plc (LSE:GNS) is 60. 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 Genus plc (LSE:GNS) is 56.

Volatility 12 m, 6m, 3m

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 Genus plc (LSE:GNS) is 21.267. 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 Genus plc (LSE:GNS) is 26.3149. The Volatility 6m is the same, except measured over the course of six months. The Volatility 6m is 27.3758.

MF Rank

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 Genus plc (LSE:GNS) is 12739. 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 Genus plc (LSE:GNS) 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.

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 Genus plc (LSE:GNS) is 0.082367. 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.

When the stock market is doing well, there may be plenty of winners in the portfolio. Figuring out when to sell a winner can be a tricky proposition. Many investors will be quick to take profits while others may want to hold out for further gains. Selling winners too early or holding on to winners too long may have a negative impact on the trading portfolio. Finding that balance between securing profits and holding out to take higher profits in the future can be very helpful for the active investor.

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