Earnings Yield is calculated by taking the operating income or earnings before interest and taxes (EBIT) and dividing it by the Enterprise Value of the company.  The Earnings Yield for NCI Building Systems, Inc. (NYSE:NCS) stands at 0.102187.  Earnings Yield helps investors measure the return on investment for a given company.  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 NCI Building Systems, Inc. (NYSE:NCS) is 0.048375.  Further, the Earnings to Price yield of NCI Building Systems, Inc. NYSE:NCS is 0.061445.  This is calculated by taking the earnings per share and dividing it by the last closing share price.  This is one of the most popular methods investors use to evaluate a company’s financial performance.

Investors often have to figure out how aggressive they want to be when getting into the stock market. There are individuals who may have had some initial success based on random luck, but diving without preparation can leave investors on the short end of the stick in the long run. Investors may be tempted by the next hot stock that is being talked about around the water cooler. Investors might not realize how risky a certain stock may be, and they may find out that the over performer has already made the run. Doing all the homework may involve tracking technicals, fundamentals, current economic data, and earnings releases. Putting in the time to do the proper research may help the investor see profits down the road.

Quant Signals – Value Composite, C- Score, MF Rank, M-Score, ERP5

The Value Composite One (VC1) is a method that investors use to determine a company’s value.  The VC1 of NCI Building Systems, Inc. (NYSE:NCS) is 27.  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 NCI Building Systems, Inc. (NYSE:NCS) is 18.

NCI Building Systems, Inc. (NYSE:NCS) currently has a Montier C-score of 3.00000. This indicator was developed by James Montier in an attempt to identify firms that were altering financial numbers 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 of something amiss. 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.  

The MF Rank (aka the Magic Formula) is a formula that pinpoints a valuable company trading at a good price.  The formula is calculated by looking at companies that have a high earnings yield as well as a high return on invested capital.  The MF Rank of NCI Building Systems, Inc. (NYSE:NCS) is 1885.  A company with a low rank is considered a good company to invest in.  The Magic Formula was introduced in a book written by Joel Greenblatt, entitled, “The Little Book that Beats the Market”.

NCI Building Systems, Inc. (NYSE:NCS) has an M-score Beneish of -2.436314. This M-score model was developed by Messod Beneish in order to detect manipulation of financial statements. The score uses a combination of eight different variables. The specifics of the variables and formula can be found in the Beneish paper “The Detection of Earnings Manipulation”.

The last signal we’ll look at is the 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 NCI Building Systems, Inc. (NYSE:NCS) is 4134.  The lower the ERP5 rank, the more undervalued a company is thought to be.

Volatility/PI

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 NCI Building Systems, Inc. (NYSE:NCS) is 53.141500.  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 NCI Building Systems, Inc. (NYSE:NCS) is 59.593100.  The Volatility 6m is the same, except measured over the course of six months.  The Volatility 6m is 49.592400.

We can now take a quick look at some historical stock price index data. NCI Building Systems, Inc. (NYSE:NCS) presently has a 10 month price index of 0.46648. 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 0.49333, the 24 month is 0.51034, and the 36 month is 0.85504. Narrowing in a bit closer, the 5 month price index is 0.49483, the 3 month is 0.67947, and the 1 month is currently 1.04359.

ROIC

The Return on Invested Capital (aka ROIC) for NCI Building Systems, Inc. (NYSE:NCS) is 0.292525.  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 NCI Building Systems, Inc. (NYSE:NCS) is 3.809342.  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 NCI Building Systems, Inc. (NYSE:NCS) is 0.163451.

Investors may be scouring the exchanges for the next breakout stock. With the next earnings season in focus, investors will be keeping their eyes open for names that have upside potential. Tracking earnings results can help the investor see how healthy the company is. Investors may choose to research companies that produce large earnings beats. Taking the time to fully research the fundamentals can help the investor start piecing together the puzzle. Although many investors may not feel comfortable making trades around earnings, they can prepare for the aftermath and set up a plan to proceed once the market settles. 

The Earnings to Price yield of Armada Hoffler Properties, Inc. (NYSE:AHH) is 0.023896.  This is calculated by taking the earnings per share and dividing it by the last closing share price.  This is one of the most popular methods investors use to evaluate a company’s financial performance.  Earnings Yield is calculated by taking the operating income or earnings before interest and taxes (EBIT) and dividing it by the Enterprise Value of the company.  The Earnings Yield for Armada Hoffler Properties, Inc. NYSE:AHH is 0.018233.  Earnings Yield helps investors measure the return on investment for a given company.  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 Armada Hoffler Properties, Inc. (NYSE:AHH) is 0.014152.

Investors are always looking to gain any possible advantage in the stock market. Knowing the various risk and return possibilities for various types of stocks can be critical to positive performance. Creating a balanced equity portfolio may be the essential first step when thinking about diving into the equity markets. Investors may come from all different types of backgrounds, and they may face completely different situations. Each investor may need to identify their objectives and try to figure out what’s best for their specific situation. Investors may want to take a conservative approach to the markets. Others will be looking to go in full throttle with a very aggressive plan. Whatever the choice, it is important to note that picking stocks based on previous returns will never guarantee future returns. Investors have many choices they can make when looking to purchase stocks. Figuring out levels of risk, expectations of returns, and the overall investment time horizon can all play a big part in crafting the initial plan.

Quant Scores/Key Ratios

Now we’ll turn to some key quant data and ratios. The Current Ratio of Armada Hoffler Properties, Inc. (NYSE:AHH) is 10.50. 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.

Armada Hoffler Properties, Inc. (NYSE:AHH)’s Leverage Ratio was recently noted as 0.581407. 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 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 Armada Hoffler Properties, Inc. (NYSE:AHH) 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, Armada Hoffler Properties, Inc. (NYSE:AHH) 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.

Armada Hoffler Properties, Inc. (NYSE:AHH) has an M-score Beneish of -2.591483. This M-score model is a little known investment tool that was developed by Messod Beneish in order to detect manipulation of financial statements. The score uses a combination of eight different variables. The specifics of the variables and formula can be found in the Beneish paper “The Detection of Earnings Manipulation”.

The Value Composite One (VC1) is a method that investors use to determine a company’s value.  The VC1 of Armada Hoffler Properties, Inc. (NYSE:AHH) 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 Armada Hoffler Properties, Inc. (NYSE:AHH) is 63.

The MF Rank (aka the Magic Formula) is a formula that pinpoints a valuable company trading at a good price.  The formula is calculated by looking at companies that have a high earnings yield as well as a high return on invested capital.  The MF Rank of Armada Hoffler Properties, Inc. (NYSE:AHH) is 10704.  A company with a low rank is considered a good company to invest in.  The Magic Formula was introduced in a book written by Joel Greenblatt, entitled, “The Little Book that Beats the Market”.

Shifting gears, we can see that Armada Hoffler Properties, Inc. (NYSE:AHH) has a Q.i. Value of 48.00000. 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.

Price Index/Share Movement

We can now take a quick look at some historical stock price index data. Armada Hoffler Properties, Inc. (NYSE:AHH) presently has a 10 month price index of 1.15255. 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 1.21782, the 24 month is 1.22085, and the 36 month is 1.76822. Narrowing in a bit closer, the 5 month price index is 1.00972, the 3 month is 1.00457, and the 1 month is currently 1.02566.

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 Armada Hoffler Properties, Inc. (NYSE:AHH) is 19.904800.  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 Armada Hoffler Properties, Inc. (NYSE:AHH) is 22.698800.  The Volatility 6m is the same, except measured over the course of six months.  The Volatility 6m is 21.241000.

Investors may be wondering which way stock market momentum will shift in the second half of the year. If the economic landscape shifts and markets start to go south, investors may need to have an action plan in place. Keeping the bigger picture in mind may help investors when markets are struggling. Short-term developments may cause the investor to lose confidence in certain holdings. Keeping the focus on stock analysis and the overall economic picture may help investors see through the trees. Sometimes the calm, cool, and collected approach will help settle the mind during turbulent market conditions. Being able to stay emotionally unattached to a stock or sector may assist the investor with making tricky buying or selling decisions. Being disciplined is an attribute that many successful investors share. Being prepared for many different scenarios can help ease the burden when those tough portfolio decisions have to be made.