In trying to determine the current valuation of PPK Group Limited (ASX:PPK) shares, we note that the Book to Market ratio of the shares stands at 0.095200. It’s commonly accepted that a Book to Market ratio greater than one indicates that the shares might be undervalued. The book to market ratio has some limitations in certain industries however where intangible assets (such as knowledge) often are not represented on a balance sheet. The ratio is calculated by dividing the market price per share by book value per share.
A ratio of a publicly-traded company’s book value to its market value. That is, the BTM is a comparison of a company’s net asset value per share to its share price. This is a useful tool to help determine how the market prices a company relative to its actual worth. A ratio greater than one indicates an undervalued company, while a ratio less than one means a company is overvalued. Value managers seek out companies with high BTMs for their portfolios.
Return on Invested Capital (ROIC), ROIC Quality, ROIC 5 Year Average
The Return on Invested Capital (aka ROIC) for PPK Group Limited (ASX:PPK) is 0.050995. 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 PPK Group Limited (ASX:PPK) is -0.711026. 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 PPK Group Limited (ASX:PPK) is -0.235467.
The Leverage Ratio of PPK Group Limited (ASX:PPK) is 0.000000. 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.
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 PPK Group Limited (ASX:PPK) is 10311. 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”.
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 PPK Group Limited (ASX:PPK) 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 PPK Group Limited (ASX:PPK) is 0.053333. 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.
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 PPK Group Limited (ASX:PPK) is 115.321400. 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 PPK Group Limited (ASX:PPK) is 116.123600. The Volatility 6m is the same, except measured over the course of six months. The Volatility 6m is 100.435500.