Stuart Olson Inc. (TSX:SOX) Quant Investor Update

In taking a look at some key indicators for Stuart Olson Inc. (TSX:SOX), we note that the current Book to Market value for the firm is at 1.473830. The Book to Market or BTM is calculated as Market Value (or Stock Price)/Book Value. Investors often look for shares with high Book to Market value as this could indicate that the equity is priced below market value and underpriced.

A ratio of a publicly-traded company’s book value to its market value. That is, the BTM is a comparison of a company’s net asset value per share to its share price. This is a useful tool to help determine how the market prices a company relative to its actual worth. A ratio greater than one indicates an undervalued company, while a ratio less than one means a company is overvalued. Value managers seek out companies with high BTMs for their portfolios.

Additional Tools

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 Stuart Olson Inc. (TSX:SOX) is 0.019763.  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.

Looking at some ROIC (Return on Invested Capital) numbers, Stuart Olson Inc. (TSX:SOX)’s ROIC is 0.237449. The ROIC 5 year average is 0.182222 and the ROIC Quality ratio is 4.467883. 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. 

In terms of EBITDA Yield, Stuart Olson Inc. (TSX:SOX) currently has a value of 0.143181. This value is derived by dividing EBITDA by Enterprise Value.

The Current Ratio of Stuart Olson Inc. (TSX:SOX) is 1.26. The Current Ratio is used by investors to determine whether a company can pay short term and long term debts. The current ratio looks at all the liquid and non-liquid assets compared to the company’s total current liabilities. A high current ratio indicates that the company might have trouble managing their working capital. A low current ratio (when the current liabilities are higher than the current assets) indicates that the company may have trouble paying their short term obligations.

The Leverage Ratio of Stuart Olson Inc. (TSX:SOX) is 0.179300. Leverage ratio is the total debt of a company 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 measure how much of a company’s capital comes from debt. With this ratio, investors can better estimate how well a company will be able to pay their long and short term financial obligations.

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 company’s stock is valuable or not. The Piotroski F-Score of Stuart Olson Inc. (TSX:SOX) is 5. A score of nine indicates a high value stock, while a score of one indicates a low value stock. The score is calculated by the return on assets (ROA), Cash flow return on assets (CFROA), change in return of assets, and quality of earnings. It is also calculated 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.

Checking in on some valuation rankings, Stuart Olson Inc. (TSX:SOX) has a Value Composite score of 10. 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 5.

Volatility/C Score

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 Stuart Olson Inc. (TSX:SOX) is 38.281600.  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 Stuart Olson Inc. (TSX:SOX) is 38.119700.  The Volatility 6m is the same, except measured over the course of six months.  The Volatility 6m is 31.040900.

Stuart Olson Inc. (TSX:SOX) currently has a Montier C-score of 1.00000. 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.

Here we will take a look at several key ratios for CapMan Oyj (HLSE:CAPMAN), starting with the Book to Market (BTM) ratio. Value investors seek stocks with high BTMs for their portfolios.  The ratio is a comparison of the firm’s net asset value per share to it’s current price.  This is helpful in determining how the market values the company compared to it’s actual worth.  The Book to Market value of CapMan Oyj currently stands at 0.520686. 

In terms of EBITDA Yield, CapMan Oyj (HLSE:CAPMAN) currently has a value of 0.017508. This value is derived by dividing EBITDA by Enterprise Value.

CapMan Oyj (HLSE:CAPMAN) presently has a current ratio of 3.43. 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.

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 CapMan Oyj HLSE:CAPMAN is 1.920542.  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 CapMan Oyj (HLSE:CAPMAN) is -68.742029.  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 CapMan Oyj (HLSE:CAPMAN) is 31.928851. This ratio is found by taking the current share price and dividing by earnings per share.

Looking at some ROIC (Return on Invested Capital) numbers, CapMan Oyj (HLSE:CAPMAN)’s ROIC is 0.032224. The ROIC 5 year average is 0.024923 and the ROIC Quality ratio is 0.623512. 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. 

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 CapMan Oyj (HLSE:CAPMAN) is -1.886481.  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 CapMan Oyj (HLSE:CAPMAN) is -0.346567.  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 Gross Margin Score is calculated by looking at the Gross Margin and the overall stability of the company over the course of 8 years.  The score is a number between one and one hundred (1 being best and 100 being the worst).  The Gross Margin Score of CapMan Oyj (HLSE:CAPMAN) is 33.00000.  The more stable the company, the lower the score.  If a company is less stable over the course of time, they will have a higher score.

At the time of writing, CapMan Oyj (HLSE:CAPMAN) 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.

Shifting gears, we can see that CapMan Oyj (HLSE:CAPMAN) has a Q.i. Value of 54.00000. 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 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 CapMan Oyj (HLSE:CAPMAN), we can see that the 12 month volatility is presently 21.862600. The 6 month volatility is 18.949900, and the 3 month is spotted at 21.649000. 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. 

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