A Look at the valuation of H. Lundbeck A/S (CPSE:LUN) as ERP5 Touches 3191

H. Lundbeck A/S (CPSE:LUN) has an ERP5 rank of 3191. The ERP5 Rank is an investment gizmo that analysts use to detect 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 enterprise is considered to be.

Active investing may be highly stressful at times. Investors often set up trades with the best intentions, but have the tendency to let too much emotion seep into the situation. When dealing with the emotions of market stress, investors may have to determine how to keep emotions in check in order to make the right decision. This may come easy to some but much harder for others. Because there is no one right way to trade, investors may have to experience certain scenarios for themselves. Creating a plan from the outset may assist the investor when tough decisions have to be made. Keeping cool under pressure is a trait shared by many successful investors. When the investor is focused on a plan or specific trading system, this can make things a bit clearer when times get tough.

Q.i. Value

The Q.i. Value of H. Lundbeck A/S (CPSE:LUN) is 12.00000. The Q.i. Value is another useful gizmo in determining if a enterprise is undervalued or not. The Q.i. Value is determined using the following ratios: EBITDA Yield, Earnings Yield, FCF Yield, and Liquidity. The lower the Q.i. value, the more undervalued the enterprise is thought to be.

The EBITDA Yield is a great way to determine a enterprise’s profitability. This number is determined by dividing a enterprise’s earnings before interest, taxes, depreciation and amortization by the enterprise’s enterprise value. Enterprise Value is determined by taking the market cap plus debt, minority interest and preferred shares, minus total cash and cash equivalents. The EBITDA Yield for H. Lundbeck A/S (CPSE:LUN) is 0.113629.

The Earnings to Price yield of H. Lundbeck A/S (CPSE:LUN) is 0.068331.  This is determined by taking the EPS and dividing it by the last closing equity price.  This is one of the most faddish formulas investors use to price out a enterprise’s financial performance.  Earnings Yield is determined by taking the operating income or earnings before interest and taxes (EBIT) and dividing it by the Enterprise Value of the enterprise.  The Earnings Yield for H. Lundbeck A/S CPSE:LUN is 0.092712.  Earnings Yield helps investors sum the return on investment for a given enterprise.  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 H. Lundbeck A/S is 0.025664.

FCF Yield 5yr Avg

The FCF Yield 5yr Average is determined by taking the five year average free cash flow of a enterprise, and dividing it by the current enterprise value. Enterprise Value is determined by taking the market cap plus debt, minority interest and preferred shares, minus total cash and cash equivalents. The average FCF of a enterprise is determined by surveying at the cash generated by operations of the enterprise. The Free Cash Flow Yield 5 Year Average of H. Lundbeck A/S (CPSE:LUN) is 0.040110.

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

The Price to book ratio is the current equity price of a enterprise divided by the book value per share. The Price to Book ratio for H. Lundbeck A/S CPSE:LUN is 4.012153. A lower price to book ratio implies that the stock might be undervalued. Similarly, Price to cash flow ratio is another useful ratio in determining a enterprise’s value. The Price to Cash Flow for H. Lundbeck A/S (CPSE:LUN) is 9.559806. This ratio is determined by dividing the market value of a enterprise by cash from operating activities. Additionally, the price to earnings ratio is another faddish way for analysts and investors to determine a enterprise’s profitability. The price to earnings ratio for H. Lundbeck A/S (CPSE:LUN) is 14.634554. This ratio is found by taking the current equity price and dividing by EPS.

Value Comp 1 / Value Comp 2

The Value Composite One (VC1) is a method that investors use to determine a enterprise’s value. The VC1 of H. Lundbeck A/S (CPSE:LUN) is 40. A enterprise with a value of 0 is thought to be an undervalued enterprise, while a enterprise with a value of 100 is considered an overvalued enterprise. The VC1 is determined 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 determined with the same ratios, but adds the Shareholder Yield. The Value Composite Two of H. Lundbeck A/S (CPSE:LUN) is 32.

Volatility 12 m, 6m, 3m

Stock volatility is a percentage that implies whether a stock is a desirable purchase. Investors look at the Volatility 12m to determine if a enterprise has a low volatility percentage or not over the course of a year. The Volatility 12m of H. Lundbeck A/S (CPSE:LUN) is 49.859700. This is determined by taking weekly log normal returns and standard deviation of the equity price over one year annualized. The lower the number, a enterprise 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 equity price over 3 months. The Volatility 3m of H. Lundbeck A/S (CPSE:LUN) is 29.782300. The Volatility 6m is the same, except measured over the course of six months. The Volatility 6m is 52.797400.

MF Rank

The MF Rank (aka the Magic Formula) is a formula that pinpoints a valuable enterprise trading at a good price. The formula is determined by surveying at companies that have a high earnings yield as well as a high return on invested capital. The MF Rank of H. Lundbeck A/S (CPSE:LUN) is 1217. A enterprise with a low rank is considered a good enterprise 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 enterprise’s stock is valuable or not. The Piotroski F-Score of H. Lundbeck A/S (CPSE:LUN) is 7. A score of nine implies a high value stock, while a score of one implies a low value stock. The score is determined by the return on assets (ROA), Cash flow return on assets (CFROA), change in return of assets, and quality of earnings. It is also determined 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 enterprise is profitable or not. One of the most faddish ratios is the “Return on Assets” (aka ROA). This score implies how profitable a enterprise is relative to its total assets. The Return on Assets for H. Lundbeck A/S (CPSE:LUN) is 0.197763. This number is determined by dividing net income after tax by the enterprise’s total assets. A enterprise that manages their assets well will have a higher return, while a enterprise that manages their assets poorly will have a lower return.

Trading the equity market can sometimes feel like a wild roller coaster ride. When stocks are soaring, investors may feel like they can’t lose. When markets are sinking, investors may feel like there is nothing that they can do. Individual investors may have experienced both ends of the spectrum. Sometimes, an investor may secure some winning trades right out of the gate. This may cause the individual to become overconfident in their ability. Markets have the ability to shoot down overconfidence very quickly. On the other side, investors may only experience losses right off the bat and become highly discouraged. Figuring out how to manage winners and losers can big a big assist to the investor’s psyche in the long-term. Frequently assessing which trades worked and examining why they worked may greatly assist the investor. The same can be said for trades that did not pan out. 

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