Taking a Deep Dive into the Numbers & Valuation: Tenneco Inc. (NYSE:TEN), Whitecap Resources Inc. (TSX:WCP)

Tenneco Inc. (NYSE:TEN) boasts a Price to Book ratio of 0.766963. This ratio is calculated by dividing the current share price by the book value per share. Investors may use Price to Book to display how the market portrays the value of a stock. Checking in on some other ratios, the company has a Price to Cash Flow ratio of 2.702475, and a current Price to Earnings ratio of -9.687336. The P/E ratio is one of the most common ratios used for figuring out whether a company is overvalued or undervalued.

Investors may be searching for various types of stocks to help diversify the portfolio. Growth stocks include shares of companies that may have the possibility of generating higher than average profit growth and revenues. These companies tend to pump earnings back into the business, and they generally expand quicker than the overall economy. Although growth stocks can be a bit riskier, they can also provide a higher level of reward down the line. Cyclical stocks consist of companies that typically will ride the wave of the overall economy. These shares tend to perform well when the economy is doing well and perform poorer when the economy is faltering.

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 Tenneco Inc. (NYSE:TEN) is -0.025855.  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 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 Tenneco Inc. (NYSE:TEN) is 4.  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.

Investors may be interested in viewing the Gross Margin score on shares of Tenneco Inc. (NYSE:TEN). The name currently has a score of 37.00000. 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.

Tenneco Inc. (NYSE:TEN) has a current MF Rank of 4960. Developed by hedge fund manager Joel Greenblatt, the intention of the formula is to spot high quality companies that are trading at an attractive price. The formula uses ROIC and earnings yield ratios to find quality, undervalued stocks. In general, companies with the lowest combined rank may be the higher quality picks.

Further, we can see that Tenneco Inc. (NYSE:TEN) has a Shareholder Yield of -0.572957 and a Shareholder Yield (Mebane Faber) of -3.19617. The first value is calculated by adding the dividend yield to the percentage of repurchased shares. The second value adds in the net debt repaid yield to the calculation. Shareholder yield has the ability to show how much money the firm is giving back to shareholders via a few different avenues. Companies may issue new shares and buy back their own shares. This may occur at the same time. Investors may also use shareholder yield to gauge a baseline rate of return.

Checking in on some valuation rankings, Tenneco Inc. (NYSE:TEN) has a Value Composite score of 11. 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 28.

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 Tenneco Inc. (NYSE:TEN) is 85.611700.  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 Tenneco Inc. (NYSE:TEN) is 84.690500.  The Volatility 6m is the same, except measured over the course of six months.  The Volatility 6m is 99.784100.

The Price Index is a ratio that indicates the return of a share price over a past period. The price index of Tenneco Inc. (NYSE:TEN) for last month was 1.47164. This is calculated by taking the current share price and dividing by the share 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 share price over 12 month periods. The Price Index 12m for Tenneco Inc. (NYSE:TEN) is 0.45888.

Many investors are concerned with the proper portfolio diversification. Stock portfolio diversification entails spreading the investment dollars around to help minimize risk. When investors are creating a portfolio, they may be looking to add a combination of growth, value, income, dividend, and foreign stocks. They may also be spreading out stock picks among various industries. Keeping a mix of stocks that perform differently under certain market conditions can help keep the portfolio afloat when the environment shifts. Holding a few large positions in a small number stocks may lead to trouble if the market turns sour and stock prices decline drastically.

Whitecap Resources Inc. (TSX:WCP) has a Price to Book ratio of 0.522857. This ratio has been calculated by dividing the current share price by the book value per share. Investors may use Price to Book to display how the market portrays the value of a stock. Checking in on some other ratios, the company has a Price to Cash Flow ratio of 2.582374, and a current Price to Earnings ratio of 30.061699. The P/E ratio is one of the most common ratios used for figuring out whether a company is overvalued or undervalued.

Individual investors have a lot to study when dealing with the stock market. New investors may start out thinking that with enough capital, they can easily start securing substantial gains. While equity market investing can help individuals build wealth, it can also be highly risky. Market education may be an extremely important part of any investor’s game plan. Knowing exactly where the money is invested and why it is invested there, may be a big help when reviewing portfolio performance down the line. Any investor who takes the reins and decides to make their own decisions should realize the importance of a well-rounded stock market education. 

Whitecap Resources Inc. (TSX:WCP) has a current MF Rank of 9309. Developed by hedge fund manager Joel Greenblatt, the intention of the formula is to spot high quality companies that are trading at an attractive price. The formula uses ROIC and earnings yield ratios to find quality, undervalued stocks. In general, companies with the lowest combined rank may be the higher quality picks.

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 Whitecap Resources Inc. (TSX:WCP) is 0.008961.  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 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 Whitecap Resources Inc. (TSX:WCP) is 8.  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.

Further, we can see that Whitecap Resources Inc. (TSX:WCP) has a Shareholder Yield of 0.104868 and a Shareholder Yield (Mebane Faber) of 0.10405. The first value is calculated by adding the dividend yield to the percentage of repurchased shares. The second value adds in the net debt repaid yield to the calculation. Shareholder yield has the ability to show how much money the firm is giving back to shareholders via a few different avenues. Companies may issue new shares and buy back their own shares. This may occur at the same time. Investors may also use shareholder yield to gauge a baseline rate of return.

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 Whitecap Resources Inc. (TSX:WCP) is 43.105800.  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 Whitecap Resources Inc. (TSX:WCP) is 49.606600.  The Volatility 6m is the same, except measured over the course of six months.  The Volatility 6m is 43.712200.

The Price Index is a ratio that indicates the return of a share price over a past period. The price index of Whitecap Resources Inc. (TSX:WCP) for last month was 0.99717. This is calculated by taking the current share price and dividing by the share 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 share price over 12 month periods. The Price Index 12m for Whitecap Resources Inc. (TSX:WCP) is 0.69696.

Checking in on some valuation rankings, Whitecap Resources Inc. (TSX:WCP) has a Value Composite score of 11. 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 6.

Investors may be interested in viewing the Gross Margin score on shares of Whitecap Resources Inc. (TSX:WCP). The name currently has a score of 26.00000. 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.

When it comes to investing in stocks, the question of risk will eventually need to be addressed. Of course, there are no guarantees when investing in the stock market. With this in mind, investors can proceed with a plan that helps minimize risk while still providing the opportunity to experience large profit potential. Each investor may have a different financial situation or tolerance for risk. There is often a fine line between being too aggressive or too conservative with equity investments. Finding that balance between the two extremes may be exactly what the earnest investor strives to do when tackling the markets.

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