Value Composition in Focus For Trifast plc (LSE:TRI) and Marlin Business Services Corp. (NasdaqGS:MRLN)

Checking in on some valuation rankings, Trifast plc (LSE:TRI) has a Value Composite score of 38. Developed by James O’Shaughnessy, the VC score uses five valuation ratios. These ratios are price to earnings, price to cash flow, EBITDA to EV, price to book value, and price to sales. The VC is displayed as a number between 1 and 100. In general, a company with a score closer to 0 would be seen as undervalued, and a score closer to 100 would indicate an overvalued company. Adding a sixth ratio, shareholder yield, we can view the Value Composite 2 score which is currently sitting at 35. 

Novice investors might be striving to create a trading strategy that produces results in the equity market. Once all the research is complete and the stocks are picked, they may need to decide what kind of time frame they will be working with in terms of buying and selling. Some investors will be making longer-term term plays, and others will be trying to make shorter-term moves. At some point, every investor will have to decide when to sell a winner and when to cut loose a loser. This can be one of the most difficult decisions to make. Investors may find it really hard to sell an underperforming stock when they still believe that it will turn around and move to profit. Waiting around for a turn around that may never come can lead to the undoing of a well crafted portfolio. Regularly staying on top of the markets may allow the investor to make educated buy or sell decisions when the time comes. This may involve following major economic data, studying company fundamentals, and checking in on historical price movement and trends. Investors who are able to keep their emotions in check might find themselves in a better position than those who let emotions get the best of them. 

In taking a look at some other notable technicals, Trifast plc (LSE:TRI)’s ROIC is 0.229876. The ROIC 5 year average is 0.211926 and the ROIC Quality ratio is 15.676829. ROIC is a profitability ratio that measures the return that an investment generates for those providing capital. ROIC helps show how efficient a firm is at turning capital into profits.

The Q.i. Value of Trifast plc (LSE:TRI) is 25.00000.  The Q.i. Value is a 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 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 Trifast plc (LSE:TRI) is 0.030031. 

Shareholder Yield
We also note that Trifast plc (LSE:TRI) has a Shareholder Yield of 0.017689 and a Shareholder Yield (Mebane Faber) of 0.00161. The first value is calculated by adding the dividend yield to the percentage of repurchased shares. The second value adds in the net debt repaid yield to the calculation. 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 shareholder yield to gauge a baseline rate of return.

MF Rank
Trifast plc (LSE:TRI) has a current MF Rank of 3348. Developed by hedge fund manager Joel Greenblatt, the intention of the formula is to spot high quality companies that are trading at an attractive price. The formula uses ROIC and earnings yield ratios to find quality, undervalued stocks. In general, companies with the lowest combined rank may be the higher quality picks.

PI
We can now take aquick look at some historical stock price index data. Trifast plc (LSE:TRI) presently has a 10 month price index of 1.02423. 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 0.95024, the 24 month is 0.99539, and the 36 month is 1.37781. Narrowing in a bit closer, the 5 month price index is 0.92723, the 3 month is 0.84043, and the 1 month is currently 0.95874.

Stock market investors may be well aware of how turbulent the investing climate can be. Markets might be surging to new highs leaving the average investor to wonder what will happen next. When everything is going higher in the stock market, it may seem as though every pick is going to be a winner. Conversely, when things are going down, investors may be cursing the day they ever entered the markets. These ups and downs are a normal part of investing in the stock market. Having a well thought out investing plan may help ease the burden of day to day volatility. Many successful investors and traders will preach the wonders of sticking to an outlined plan. It may take some time to actually realize how well the plan is working. If after some time the results continue to be sub-par, then it may be time to devise a different plan.

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The Value Composite One (VC1) is a method that investors use to determine a company’s value.  The Value Composite score of Marlin Business Services Corp. (NasdaqGS:MRLN) is 48.  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 Marlin Business Services Corp. (NasdaqGS:MRLN) is 43.

Technicals

Investors will be paying extra close attention to company earnings reports during this current season. With stocks bordering on all-time highs, any substantial earnings beats may propel stocks to even greater heights. On the flip side, stocks that may be overvalued could see a significant correction if earnings disappoint. Every earnings season has its share of big winners and big losers. Trying to project the stocks that will post large beats for the quarter can be tricky. Even if the research points to a company handily beating on the earnings front, the stock may not always react as expected. Trading around earnings reports can get quite dicey for even the most seasoned investors.

In taking a look at some other notable technicals, Marlin Business Services Corp. (NasdaqGS:MRLN)’s ROIC is 0.028580. The ROIC 5 year average is 0.039967 and the ROIC Quality ratio is -5.287701. ROIC is a profitability ratio that measures the return that an investment generates for those providing capital. ROIC helps show how efficient a firm is at turning capital into profits.

We also note that Marlin Business Services Corp. (NasdaqGS:MRLN) has a Shareholder Yield of 0.018708 and a Shareholder Yield (Mebane Faber) of -0.37148. The first value is calculated by adding the dividend yield to the percentage of repurchased shares. The second value adds in the net debt repaid yield to the calculation. 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 shareholder yield to gauge a baseline rate of return.

Marlin Business Services Corp. (NasdaqGS:MRLN) has a current MF Rank of 7855. Developed by hedge fund manager Joel Greenblatt, the intention of the formula is to spot high quality companies that are trading at an attractive price. The formula uses ROIC and earnings yield ratios to find quality, undervalued stocks. In general, companies with the lowest combined rank may be the higher quality picks.

We can now take a quick look at some historical stock price index data. Marlin Business Services Corp. (NasdaqGS:MRLN) presently has a 10 month price index of 0.97014. 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 0.88363, the 24 month is 0.93517, and the 36 month is 1.42661. Narrowing in a bit closer, the 5 month price index is 1.12460, the 3 month is 0.99592, and the 1 month is currently 1.03629.

The C-Score is a system developed by James Montier that helps determine whether a company is involved in falsifying their financial statements.  The C-Score is calculated by a variety of items, including a growing difference in net income verse cash flow, increasing days outstanding, growing days sales of inventory, increasing assets to sales, declines in depreciation, and high total asset growth.  The C-Score of Marlin Business Services Corp. (NasdaqGS:MRLN) is -1.00000.  The score ranges on a scale of -1 to 6.  If the score is -1, then there is not enough information to determine the C-Score.  If the number is at zero (0) then there is no evidence of fraudulent book cooking, whereas a number of 6 indicates a high likelihood of fraudulent activity. The C-Score assists investors in assessing the likelihood of a company cheating in the books.

Investors might be trying to figure out how to play the stock market at current levels. The optimist may see much more upward action in the future while the pessimist may be waiting for the impending disaster. Buying into the market at these levels will no doubt come with a bit of caution. Even at these levels, there may still be some good buys. The average individual investor may need to spend a little more time doing the homework, but it may pay off handsomely if the stock market decides to break out higher. As companies start to report quarterly earnings, investors will be watching to see what types of trends emerge. A generally upbeat earnings season may give the bulls more strength to breakout and continue the charge higher into the later stages of the year.