Stock in Focus: Australian Vanadium Limited (ASX:AVL)
| Date: Nov 17, 2017 |
| Australian Vanadium Limited (ASX:AVL) presently has an EV or Enterprise Value of 25122. The EV helps show how the market assigns value to a company as a whole. EV is a modification of market cap, as it incorporates debt and cash for assessing a firm’s valuation. Watching a firm’s EV may be useful when comparing companies with different capital structures. EV can help investors gain a truer sense of whether a company is undervalued or not.
Investing in the stock market will always involve some level of risk. Investors often have to determine how much they are willing to risk, and try to project what the potential reward could be. Taking on too much risk may put the average investor out of their comfort zone. Finding that sweet spot for risk appetite may help investors get on the correct path to conquering the markets. As companies continue to report quarterly earnings, investors will be watching which companies post larger than expected surprises. Analysts will also be watching the numbers closely in order to make sense of the results and update estimates accordingly. Currently, Australian Vanadium Limited (ASX:AVL)’s ROIC is -0.117044. The ROIC 5 year average is -0.288888 and the ROIC Quality ratio is -1.278543. ROIC is a profitability ratio that measures the return that an investment generates for those providing capital. ROIC helps show how efficient a company is at turning capital into profits. ROIC may be a good measure to view when examining whether or not a company is able to invest wisely. ROIC may also be an important metric for the value investor who is trying to determine the company’s moat. Australian Vanadium Limited (ASX:AVL) has a current Value Composite Score of 86. Using a scale from 0 to 100, a lower score would represent an undervalued company and a higher score would indicate an expensive or overvalued company. This ranking was developed by James O’Shaughnessy using six different valuation ratios including price to book value, price to sales, EBITDA to EV, price to cash flow, price to earnings, and shareholder yield. Investors seeking value in the stock market may be eyeing the Magic Formula Rank or MF Rank for Australian Vanadium Limited (ASX:AVL). Presently, the company has a MF Rank of 13451. The Magic Formula was devised and made popular by Joel Greenblatt in his book “The Little Book That Beats the Market”. Greenblatt’s formula helps find stocks that are priced attractively with a high earnings yield, or strong reported profits in comparison to the market value of the company. To spot opportunities in the market, investors may be searching for stocks that have the lowest combined MF Rank. Market watchers may also be following some quality ratios for Australian Vanadium Limited (ASX:AVL). Currently, the company has a Gross Margin (Marx) ratio of 0.009561. This calculation is based on the research by University of Rochester professor Robert Novy-Marx. Marx believed that a high gross income ratio was a sign of a quality company. Looking further, Australian Vanadium Limited (ASX:AVL) has a Gross Margin score of 11.00000. This score is based on the Gross Margin (Marx) metric using a scale from 1 to 100 where a 1 would be seen as positive, and a 100 would be viewed as negative. |
