Advantage Oil & Gas Ltd. (TSX:AAV), Global Partners LP (NYSE:GLP) Quant Signal & Valuation Review

The Price to Cash Flow for Advantage Oil & Gas Ltd. (TSX:AAV) is 3.472905. The price to cash flow formula is a useful tool investors can use in order to determine the value of a company. Generally, a higher P/CF ratio indicates that the company is less capital demanding and the lesser price to cash flow indicates that the company is more capital demanding.

Formula: Price to Cash Flow = Current Stock Price/ Cash Flow per Share

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 Advantage Oil & Gas Ltd. (TSX:AAV) is 11.455991. This ratio is found by taking the current share price and dividing by earnings per share.

Further, Price to Book ratio for Advantage Oil & Gas Ltd. TSX:AAV is 0.575987. A lower price to book ratio indicates that the stock might be undervalued.

In taking a look at some additional key numbers, Advantage Oil & Gas Ltd. (TSX:AAV) has a current ERP5 Rank of 4337. 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 looking at the ERP5 ranking, it is generally considered the lower the value, the better.

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 Advantage Oil & Gas Ltd. (TSX:AAV) is 15.00000.  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.

Advantage Oil & Gas Ltd. (TSX:AAV) currently has a Montier C-score of 0.00000. This indicator was developed by James Montier in an attempt to identify firms that were fixing 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.

Advantage Oil & Gas Ltd. (TSX:AAV) has an M-score Beneish of -1.300770. 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 Value Composite One (VC1) is a method that investors use to determine a company’s value.  The VC1 of Advantage Oil & Gas Ltd. (TSX:AAV) is 8.  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 Advantage Oil & Gas Ltd. (TSX:AAV) is 16.

At the time of writing, Advantage Oil & Gas Ltd. (TSX:AAV) has a Piotroski F-Score of 6. 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.

Valuation

Advantage Oil & Gas Ltd. (TSX:AAV) presently has a current ratio of 0.78. 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 Earnings to Price yield of Advantage Oil & Gas Ltd. TSX:AAV is 0.087291.  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 Advantage Oil & Gas Ltd. TSX:AAV is 0.108584.  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 Advantage Oil & Gas Ltd. (TSX:AAV) is -0.008977.

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 Advantage Oil & Gas Ltd. (TSX:AAV) is 1.229882.  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 Advantage Oil & Gas Ltd. (TSX:AAV) is 21.038257.  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.

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 Advantage Oil & Gas Ltd. (TSX:AAV) is 35.359600. 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 Advantage Oil & Gas Ltd. (TSX:AAV) is 44.316200. The Volatility 6m is the same, except measured over the course of six months. The Volatility 6m is 36.236500.

Here we will take a look into some valuation metrics for Global Partners LP NYSE:GLP shares.

Price-To-Cash-Flow-Ratio is a term that indicates the degree of cash flow valuation of the enterprise in the securities market. It is derived from the P/E – Price Earnings Ratio, in which the profit is replaced by cash flow. Unlike P/E, the ratio isn’t affected by the chosen depreciation methods, making it suitable for geographic comparison.  Global Partners LP currently has a P/CF ratio of  .

Volatility

Watching some historical volatility numbers on shares of Global Partners LP (NYSE:GLP), we can see that the 12 month volatility is presently 20.379300. The 6 month volatility is 23.579500, and the 3 month is spotted at 23.571600. 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. 

We can now take a quick look at some historical stock price index data. Global Partners LP (NYSE:GLP) presently has a 10 month price index of 0.96110. 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 0.94146, the 24 month is 1.41472, and the 36 month is 0.60312. Narrowing in a bit closer, the 5 month price index is 1.07260, the 3 month is 0.99514, and the 1 month is currently 0.99714.

Valuation Ratios

Looking at some ROIC (Return on Invested Capital) numbers, Global Partners LP (NYSE:GLP)’s ROIC is 0.107396. The ROIC 5 year average is 0.086607 and the ROIC Quality ratio is 2.591253. 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, Global Partners LP (NYSE:GLP) currently has a value of 0.143115. This value is derived by dividing EBITDA by Enterprise Value.

The Price to Book ratio (Current share price / Book value per share) is a good valuation measure you can use to find undervalued investment ideas.  A low Price to Book could indicate that the shares are undervalued in their industry.  Generally speaking a P/B ratio under 1 is considered low and is best used in relation to asset-heavy firms.  At the time of writing Global Partners LP (NYSE:GLP) has a price to book ratio of 1.513083.

The Leverage Ratio of Global Partners LP (NYSE:GLP) is 0.504235. 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.

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 Global Partners LP (NYSE:GLP) is -0.010551.  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.

The Value Composite One (VC1) is a method that investors use to determine a company’s value.  The VC1 of Global Partners LP (NYSE:GLP) is 28.  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 Global Partners LP (NYSE:GLP) is 19.

At the time of writing, Global Partners LP (NYSE:GLP) has a Piotroski F-Score of 6. 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.

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 Global Partners LP NYSE:GLP is 1.513083.  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 Global Partners LP (NYSE:GLP) is .  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 Global Partners LP (NYSE:GLP) is -23.334324. This ratio is found by taking the current share price and dividing by earnings per share.

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