How Does the MF Rank Score Look For These Stocks Legal & General Group Plc (LSE:LGEN), Loxo Oncology, Inc. (NasdaqGM:LOXO)?

Legal & General Group Plc (LSE:LGEN) has a current MF Rank of 7628. 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 are constantly trying to make smart moves in the stock market. Taking stock of personal strengths and weaknesses can help the investor attack the market with heightened focus. Often times, individuals may fall into traps that could have been avoided. Coming up with a sound investment plan and setting realistic expectations may help the novice investor become better prepared and focused. Positive returns are attainable with the proper preparation and dedication. Investors working with a longer-term plan might be approaching the stock market from a completely different angle than a shorter-term trader. Investors who plan to be in the market for a long period of time may not be as concerned about the day to day fluctuations as short-term traders. 

Checking in on some valuation rankings, Legal & General Group Plc (LSE:LGEN) has a Value Composite score of 20. 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 13.

Legal & General Group Plc (LSE:LGEN) has a Price to Book ratio of 1.77. This ratio is calculated by dividing the current share price by the book value per share. Investors may use Price to Book to display how the market portrays the value of a stock. Checking in on some other ratios, the company has a Price to Cash Flow ratio of 2.31, and a current Price to Earnings ratio of 7.94. The P/E ratio is one of the most common ratios used for figuring out whether a company is overvalued or undervalued.

Shifting gears, we can see that Legal & General Group Plc (LSE:LGEN) has a Q.i. Value of 10. The Q.i. Value ranks companies using four ratios. These ratios consist of EBITDA Yield, FCF Yield, Liquidity, and Earnings Yield. The purpose of the Q.i. Value is to help identify companies that are the most undervalued. Typically, the lower the value, the more undervalued the company tends to be.

Watching some historical volatility numbers on shares of Legal & General Group Plc (LSE:LGEN), we can see that the 12 month volatility is presently 18.06. The 6 month volatility is 19.17, and the 3 month is spotted at 22.54. Following volatility data can help measure how much the stock price has fluctuated over the specified time period. Although past volatility action may help project future stock volatility, it may also be vastly different when taking into account other factors that may be driving price action during the measured time period. 

At the time of writing, Legal & General Group Plc (LSE:LGEN) has a Piotroski F-Score of 7. 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 may be interested in viewing the Gross Margin score on shares of Legal & General Group Plc (LSE:LGEN). The name currently has a score of 10. 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 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 Legal & General Group Plc (LSE:LGEN) is 0.07.  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 Legal & General Group Plc LSE:LGEN is 2.10.  This number is calculated by looking at the sum of the dividend yield plus percentage of sales repurchased and net debt repaid yield.

Price Index

We can now take a quick look at some historical stock price index data. Legal & General Group Plc (LSE:LGEN) presently has a 10 month price index of 0.95. 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 0.94, the 24 month is 1.06, and the 36 month is 1.02. Narrowing in a bit closer, the 5 month price index is 0.88, the 3 month is 0.91, and the 1 month is currently 0.89.

A highly common way to study stocks is through fundamental analysis. Investors examining the fundamentals may be analyzing the underlying factors that can affect the performance of a particular company. When focusing in on a specific company, investors will look at company management, financial information, business prospects, and industry competition. The goal of digging into the numbers is often times a way to calculate the current value of a company and try to gauge the value into the future. Zooming in on the vital statistics of a company can help provide a glimpse of the company’s overall health.

Loxo Oncology, Inc. (NasdaqGM:LOXO) has a current Magic Formula rank of 14613. The formula which was developed by hedge fund manager Joel Greenblatt, is intended 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.

Some stock market investors may abide to the saying, nothing ventured nothing gained. Others may operate by following the saying slow and steady wins the race. The correct move for one investor may not be the same for another. Some may choose to go all in, while others may look to reduce risk with stable long-term staple companies. Active equity investors may be forced to make hard decisions at some point, but working hard and being prepared may prove to be a portfolio booster. Dedicated investors are often willing to put in the extra hours in order to make sure no stone is left unturned.

The Value Composite One (VC1) is a method that investors use to determine a company’s value.  The VC1 of Loxo Oncology, Inc. (NasdaqGM:LOXO) is 83.  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 Loxo Oncology, Inc. (NasdaqGM:LOXO) is 83.

Shifting gears, we can see that Loxo Oncology, Inc. (NasdaqGM:LOXO) has a Q.i. Value of 59. The Q.i. Value ranks companies using four ratios. These ratios consist of EBITDA Yield, FCF Yield, Liquidity, and Earnings Yield. The purpose of the Q.i. Value is to help identify companies that are the most undervalued. Typically, the lower the value, the more undervalued the company tends to be.

Watching some historical volatility numbers on shares of Loxo Oncology, Inc. (NasdaqGM:LOXO), we can see that the 12 month volatility is presently 50.38. The 6 month volatility is 46.08, and the 3 month is spotted at 56.04. Following volatility data can help measure how much the stock price has fluctuated over the specified time period. Although past volatility action may help project future stock volatility, it may also be vastly different when taking into account other factors that may be driving price action during the measured time period. 

Investors may be interested in viewing the Gross Margin score on shares of Loxo Oncology, Inc. (NasdaqGM:LOXO). The name currently has a score of 50. 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.

At the time of writing, Loxo Oncology, Inc. (NasdaqGM:LOXO) has a Piotroski F-Score of 4. 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.

Volatility

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 Loxo Oncology, Inc. (NasdaqGM:LOXO) is 50.38.  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 Loxo Oncology, Inc. (NasdaqGM:LOXO) is 56.04.  The Volatility 6m is the same, except measured over the course of six months.  The Volatility 6m is 46.08.

Return on Invested Capital (ROIC), ROIC Quality, ROIC 5 Year Average

The Return on Invested Capital (aka ROIC) for Loxo Oncology, Inc. (NasdaqGM:LOXO) is -1.36. 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 Loxo Oncology, Inc. (NasdaqGM:LOXO) is -1.29. 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 Loxo Oncology, Inc. (NasdaqGM:LOXO) is -1.17.

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 Loxo Oncology, Inc. (NasdaqGM:LOXO) is -0.15.  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.

It may be difficult for many investors to decide the right time to buy or sell a stock. Veteran investors may seem like they have it all figured out, and amateurs may feel like they are swimming upstream. Seasoned traders may have spent many years monitoring market ebbs and flows. Knowing when to take profits or cut losses can be a tough skill to achieve. It might be hard letting go of a well researched stock that hasn’t been performing well. Being able to exit a trade that has gone south can be a portfolio saver in the long run.

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