RGC Resources, Inc. (NasdaqGM:RGCO), Bluechiip Limited (ASX:BCT) MF Rank Score Update

RGC Resources, Inc. (NasdaqGM:RGCO) has a current MF Rank of 9081. 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.

Investors may be doing a mid-year review of the portfolio. They may be looking to see what changes need to be made for the second half of the year. Maybe there were some great performers that don’t need much attention. There may also be some not so great performers that need to be looked at a little bit closer. As the next earnings reports become available, investors will be able to scrutinize the numbers. Investors may be tracking sell-side analyst projections heading into earnings. Analysts will often update their numbers as the earnings date approaches.

Free Cash Flow Growth (FCF Growth) is the free cash flow of the current year minus the free cash flow from the previous year, divided by last year’s free cash flow.  The FCF Growth of RGC Resources, Inc. (NasdaqGM:RGCO) is 1.00.  Free cash flow (FCF) is the cash produced by the company minus capital expenditure.  This cash is what a company uses to meet its financial obligations, such as making payments on debt or to pay out dividends.  

The Free Cash Flow Score (FCF Score) is a helpful tool in calculating the free cash flow growth with free cash flow stability – this gives investors the overall quality of the free cash flow.  The FCF Score of RGC Resources, Inc. (NasdaqGM:RGCO) is 1.55.  Experts say the higher the value, the better, as it means that the free cash flow is high, or the variability of free cash flow is low or both.

The Return on Invested Capital (aka ROIC) for RGC Resources, Inc. (NasdaqGM:RGCO) is 0.06.  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 RGC Resources, Inc. (NasdaqGM:RGCO) is 13.29.  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 RGC Resources, Inc. (NasdaqGM:RGCO) is 0.08.

Shareholder Yield

The Shareholder Yield is a way that investors can see how much money shareholders are receiving from a company through a combination of dividends, share repurchases and debt reduction.  The Shareholder Yield of RGC Resources, Inc. (NasdaqGM:RGCO) is -0.08.  This percentage is calculated by adding the dividend yield plus the percentage of shares repurchased.  Dividends are a common way that companies distribute cash to their shareholders.  Similarly, cash repurchases and a reduction of debt can increase the shareholder value, too.  Another way to determine the effectiveness of a company’s distributions is by looking at the Shareholder yield (Mebane Faber).  The Shareholder Yield (Mebane Faber) of RGC Resources, Inc. NasdaqGM:RGCO is -0.13.  This number is calculated by looking at the sum of the dividend yield plus percentage of sales repurchased and net debt repaid yield.

The Value Composite One (VC1) is a method that investors use to determine a company’s value.  The VC1 of RGC Resources, Inc. (NasdaqGM:RGCO) is 58.  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 RGC Resources, Inc. (NasdaqGM:RGCO) is 64.

Investors may be interested in viewing the Gross Margin score on shares of RGC Resources, Inc. (NasdaqGM:RGCO). The name currently has a score of 29. 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.

ERP5 Rank

The ERP5 Rank is an investment tool that analysts use to discover undervalued companies. The ERP5 looks at the Price to Book ratio, Earnings Yield, ROIC and 5 year average ROIC. The ERP5 of RGC Resources, Inc. (NasdaqGM:RGCO) is 10407. The lower the ERP5 rank, the more undervalued a company is thought to be.

C-Score – Montier

RGC Resources, Inc. (NasdaqGM:RGCO) currently has a Montier C-score of -1. This indicator was developed by James Montier in an attempt to identify firms that were cooking the books in order to appear better on paper. The score ranges from zero to six where a 0 would indicate no evidence of book cooking, and a 6 would indicate a high likelihood. A C-score of -1 would indicate that there is not enough information available to calculate the score. Montier used six inputs in the calculation. These inputs included a growing difference between net income and cash flow from operations, increasing receivable days, growing day’s sales of inventory, increasing other current assets, decrease in depreciation relative to gross property plant and equipment, and high total asset growth.

F Score

At the time of writing, RGC Resources, Inc. (NasdaqGM:RGCO) has a Piotroski F-Score of 3. 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 are always striving to locate the next great stock to add to the portfolio. Finding that next winner may involve some dedicated research and perseverance. Sorting through the immense amount of information about public companies can be a chore. Many sharp investors will attack the equity markets from many various angles. This may encompass keeping close tabs on fundamental and technical data. This may also include monitoring analyst opinions and tracking institutional transactions.

The MF Rank developed by hedge fund manager Joel Greenblatt, is intended 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. Bluechiip Limited (ASX:BCT) has a current MF Rank of 16554.

Investors may be looking for solid stocks to add to the portfolio. Sometimes, investors may choose to go against the grain and try something that nobody else is doing. This typically comes with plenty of time and research examining those appealing stocks. Digging into the fundamentals as well as tracking technical levels can help separate the winners from the losers. Investors who are able to keep the required temperament may be able to cope with market volatility and get positioned to take advantage of any opportunity that presents itself. 

Free Cash Flow Growth (FCF Growth) is the free cash flow of the current year minus the free cash flow from the previous year, divided by last year’s free cash flow.  The FCF Growth of Bluechiip Limited (ASX:BCT) is 0.23.  Free cash flow (FCF) is the cash produced by the company minus capital expenditure.  This cash is what a company uses to meet its financial obligations, such as making payments on debt or to pay out dividends.  The Free Cash Flow Score (FCF Score) is a helpful tool in calculating the free cash flow growth with free cash flow stability – this gives investors the overall quality of the free cash flow.  The FCF Score of Bluechiip Limited (ASX:BCT) is 0.91.  Experts say the higher the value, the better, as it means that the free cash flow is high, or the variability of free cash flow is low or both.

Investors may be interested in viewing the Gross Margin score on shares of Bluechiip Limited (ASX:BCT). The name currently has a score of 68. 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.

The Return on Invested Capital (aka ROIC) for Bluechiip Limited (ASX:BCT) is -2.34.  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 Bluechiip Limited (ASX:BCT) is -2.27.  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 Bluechiip Limited (ASX:BCT) is -2.48.

Shareholder Yield

The Shareholder Yield is a way that investors can see how much money shareholders are receiving from a company through a combination of dividends, share repurchases and debt reduction.  The Shareholder Yield of Bluechiip Limited (ASX:BCT) is -0.46.  This percentage is calculated by adding the dividend yield plus the percentage of shares repurchased.  Dividends are a common way that companies distribute cash to their shareholders.  Similarly, cash repurchases and a reduction of debt can increase the shareholder value, too.  Another way to determine the effectiveness of a company’s distributions is by looking at the Shareholder yield (Mebane Faber).  The Shareholder Yield (Mebane Faber) of Bluechiip Limited ASX:BCT is -0.35.  This number is calculated by looking at the sum of the dividend yield plus percentage of sales repurchased and net debt repaid yield.

The Value Composite One (VC1) is a method that investors use to determine a company’s value.  The VC1 of Bluechiip Limited (ASX:BCT) is 94.  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 Bluechiip Limited (ASX:BCT) is 96.

Key Ratios

Bluechiip Limited (ASX:BCT) presently has a current ratio of 2.18. The current ratio, also known as the working capital ratio, is a liquidity ratio that displays the proportion of current assets of a business relative to the current liabilities. The ratio is simply calculated by dividing current liabilities by current assets. The ratio may be used to provide an idea of the ability of a certain company to pay back its liabilities with assets. Typically, the higher the current ratio the better, as the company may be more capable of paying back its obligations.

Bluechiip Limited (ASX:BCT)’s Leverage Ratio was recently noted as 0.22. This ratio is calculated by dividing total debt by total assets plus total assets previous year, divided by two. The leverage of a company is relative to the amount of debt on the balance sheet. This ratio is often viewed as one measure of the financial health of a firm.

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 Bluechiip Limited ASX:BCT is 18.30.  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 Bluechiip Limited (ASX:BCT) is -12.05.  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 Bluechiip Limited (ASX:BCT) is -11.97. This ratio is found by taking the current share price and dividing by earnings per share.

Investors often have to make decisions on what to do with stocks that have unperformed. Maybe things didn’t pan out the right way, even after combing through the numbers. Sometimes it may be difficult to let go of a stock that isn’t up to par. Knowing when to cut a loser from the portfolio can be a useful skill for the individual investor. On the flip side, investors may have to decide whether to sell a winner. There may be occasions when a stock goes through the roof without any notice. The tricky part may be figuring out whether to cash in, or keep riding the wave. Heading into the next few quarters, investors will be trying to make sure they have all the bases covered.