Silicom Ltd. (NasdaqGS:SILC), K-Bro Linen Inc. (TSX:KBL): Taking a Closer Look at the Margin Scores

Investors may be interested in viewing the Gross Margin score on shares of Silicom Ltd. (NasdaqGS:SILC). The name currently has a score of 9.00000. 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 low score of 9.00000 for Silicom Ltd. signals a top score for stability and growth.

Investors may be viewing into the crystal ball trying to calculate where the equity market will be shifting as we move into the second half of the year. Investors may be crucial pressed to find bargains with the markets still riding high. Sometimes, keeping it simple may be affirmatively what the doctor ordered when approaching the markets. Focusing on relevant data instead of information that breezes through may make a huge difference for the individual investor. Focusing on companies that have strong competitive advantages may assist fight off unwelcome surprises that often come with uncertain economic landscapes. Focusing on the long-term might be right for some investors. Developing a good safety margin may also assist keep the paramount investing factors in focus. Covering all the bases may assist increase the odds of success when trading equities.

At the time of writing, Silicom Ltd. (NasdaqGS:SILC) has a Piotroski F-Score of 5. The F-Score may assist bring to light 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 enterprise 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.

Silicom Ltd. (NasdaqGS:SILC) has a current ERP5 Rank of 3877 . The ERP5 Rank may assist investors with spotting companies that are undervalued. This ranking uses four ratios. These ratios are Earnings Yield, ROIC, Price to Book, and 5 year average ROIC. When viewing at the ERP5 ranking, it is generally considered the lower the value, the better.

Shifting gears, we can see that Silicom Ltd. (NasdaqGS:SILC) has a Q.i. Value of 27.00000. 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 assist identify companies that are the most undervalued. Typically, the lower the value, the more undervalued the enterprise tends to be.

Checking in on some valuation rankings, Silicom Ltd. (NasdaqGS:SILC) has a Value Composite score of 41. 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 enterprise with a score closer to 0 would be seen as undervalued, and a score closer to 100 would indicate an overvalued enterprise. Adding a sixth ratio, shareholder yield, we can view the Value Composite 2 score which is currently sitting at 50.

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 Silicom Ltd. (NasdaqGS:SILC) is 9.791832.  Free cash flow (FCF) is the cash produced by the enterprise minus capital expenditure.  This cash is what a enterprise 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 useful mechanism 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 Silicom Ltd. (NasdaqGS:SILC) is 6.567751.  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.

Price Index

The Price Index is a ratio that signals the return of a equity price over a past timeframe. The price index of Silicom Ltd. (NasdaqGS:SILC) for last month was 1.17383. This is determined by taking the current equity price and dividing by the equity price one month ago. If the ratio is greater than 1, then that means there has been an increase in price over the month. If the ratio is less than 1, then we can determine that there has been a decrease in price. Similarly, investors look up the equity price over 12 month periods. The Price Index 12m for Silicom Ltd. (NasdaqGS:SILC) is 0.61358.
Price Range 52 Weeks

Some of the best financial predictions are formed by using a array of financial tools. The Price Range 52 Weeks is one of the tools that investors use to determine the lowest and highest price at which a stock has traded in the previous 52 weeks. The Price Range of Silicom Ltd. (NasdaqGS:SILC) over the past 52 weeks is 0.600000. The 52-week range can be found in the stock’s quote summary.

C Score (Montier)

The C-Score is a system developed by James Montier that helps determine whether a enterprise is involved in falsifying their financial statements. The C-Score is determined by a array 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 Silicom Ltd. (NasdaqGS:SILC) 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 signals a high likelihood of fraudulent activity. The C-Score assists investors in assessing the likelihood of a enterprise cheating in the books.

Investors often have to decide how aggressive they are going to be in the equity market. Having the mindset of getting rich quick may result in the rapid loss of capital. Of course, there are those who have possibly had luck on their side, but jumping in head first without a plan can be a recipe for disaster. It may be tempting to take a leap with a risky stock. However, high returns in the equity market may come with extensive uncertainty and volatility. Managing that uncertainty in turbulent markets may assist keep the average investor above water when things swing the wrong way. Investors may want to assess if they are trading too much or trading the wrong types of stocks. Doing all the research may involve keeping a close tab on technicals, fundamentals, relevant economic data, and earnings reports. Investors may have to find a way to keep the rational side from being consumed by irrational behavior when analyzing the markets.

Investors considering positions in K-Bro Linen Inc. (TSX:KBL), might be interested in the Gross Margin Score of the enterprise. The shares currently have a score of 28.00000. 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 low score of 28.00000 for K-Bro Linen Inc. signals a top score for stability and growth.

Trying to project the day to day short-term movements of the equity market may be all but impossible. Stocks have the tendency to make sudden moves on even the slightest bit of news or for apparently no reason at all. The daily trader may be viewing to capitalize on swings or momentum, but the long-term investor may be searching for stability and consistency over a sustained timeframe of time. During trading sessions, stock movements can seem like a popularity contest sometimes. Even after careful study, there may be no logical reason for a particular stock move. Riding out the waves of uncertainty may not be easy, but having a full-proof plan for when markets erode may just be the savior. Having the patience to wait out abnormal moves may assist evade the mistake of letting go too soon out of panic. 

Checking in on some valuation rankings, K-Bro Linen Inc. (TSX:KBL) has a Value Composite score of 49. 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 enterprise with a score closer to 0 would be seen as undervalued, and a score closer to 100 would indicate an overvalued enterprise. Adding a sixth ratio, shareholder yield, we can view the Value Composite 2 score which is currently sitting at 58.

In trying to determine the current valuation of K-Bro Linen Inc. (TSX:KBL) shares, we note that the Book to Market ratio of the shares stands at 0.507924. It’s commonly accepted that a Book to Market ratio greater than one signals 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 determined by dividing the market price per share by book value per share.  

At the time of writing, K-Bro Linen Inc. (TSX:KBL) has a Piotroski F-Score of 5. The F-Score may assist bring to light 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 enterprise 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.

K-Bro Linen Inc. (TSX:KBL) has a current ERP5 Rank of 8396 . The ERP5 Rank may assist investors with spotting companies that are undervalued. This ranking uses four ratios. These ratios are Earnings Yield, ROIC, Price to Book, and 5 year average ROIC. When viewing at the ERP5 ranking, it is generally considered the lower the value, the better.

Ever wonder how investors predict positive equity price momentum?  The Cross SMA 50/200, also known as the “Golden Cross” is the fifty day moving average divided by the two hundred day moving average.  The SMA 50/200 for K-Bro Linen Inc. (TSX:KBL) is currently 0.95957.  If the Golden Cross is greater than 1, then the 50 day moving average is above the 200 day moving average – indicating a positive equity price momentum.  If the Golden Cross is less than 1, then the 50 day moving average is below the 200 day moving average, indicating that the price might drop.

The Leverage Ratio of K-Bro Linen Inc. (TSX:KBL) is 0.259653.  Leverage ratio is the total debt of a enterprise 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 sum how much of a enterprise’s capital comes from debt.  With this ratio, investors can better estimate how well a enterprise will be able to pay their long and short term financial obligations.

ROA & ROIC

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 signals how profitable a enterprise is relative to its total assets.  The Return on Assets for K-Bro Linen Inc. (TSX:KBL) is 0.019203.  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.

The Return on Invested Capital (aka ROIC) for K-Bro Linen Inc. (TSX:KBL) is 0.075756.  The Return on Invested Capital is a ratio that determines whether a enterprise is profitable or not.  It tells investors how well a enterprise is turning their capital into profits.  The ROIC is determined by dividing the net operating profit (or EBIT) by the employed capital.  The employed capital is determined by subrating current liabilities from total assets.  Similarly, the Return on Invested Capital Quality ratio is a mechanism in evaluating the quality of a enterprise’s ROIC over the course of five years.  The ROIC Quality of K-Bro Linen Inc. (TSX:KBL) is 4.894935.  This is determined by dividing the five year average ROIC by the Standard Deviation of the 5 year ROIC.  The ROIC 5 year average is determined using the five year average EBIT, five year average (net working capital and net fixed assets).  The ROIC 5 year average of K-Bro Linen Inc. (TSX:KBL) is 0.147559.

Investors may be getting ready to buy into the equity market as we cruise into the second half of the year. Filtering out the constant noise in the markets can be challenging. Sifting through all the data can be trying, especially for the beginner investor. Digging down into the fundamentals may assist weed out the undesirable companies. Investors will most likely be scouting out the equity market for any bargains. Although they may be harder to find these days, there still may be a hidden gem out there somewhere. As companies start to report quarterly earnings, investors will be closely following to see which ones are poised for success over the next few quarters.    

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