In taking a look at some key indicators for Computer Programs and Systems, Inc. (NasdaqGS:CPSI), we note that the current Book to Market value for the firm is at 0.465997. 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.
Under recent market conditions, it may be quite difficult to be overly bearish. Most signs seem to be pointing in the right direction as investors keep concentrating on superior returns from the stock market. At this point in time, investors may have to make the tough decision whether to be fully invested in the stock market, or keep some cash handy on the sidelines. As we have seen, there will be a few days or weeks where market action may spur some second guessing, but the bulls seem they are still going to keep running. Many investors may be crafting plans for when the good times inevitably come to an end. Being prepared for market changes may help weather the storm when it comes.
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 Computer Programs and Systems, Inc. (NasdaqGS:CPSI) is 0.050725. 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, Computer Programs and Systems, Inc. (NasdaqGS:CPSI)’s ROIC is 0.353422. The ROIC 5 year average is 0.765566 and the ROIC Quality ratio is 1.335431. 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, Computer Programs and Systems, Inc. (NasdaqGS:CPSI) currently has a value of 0.066960. This value is derived by dividing EBITDA by Enterprise Value.
The Current Ratio of Computer Programs and Systems, Inc. (NasdaqGS:CPSI) is 1.71. 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 Computer Programs and Systems, Inc. (NasdaqGS:CPSI) is 0.396588. 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.
Investors may be doing a portfolio evaluation as we head into the second half of the calendar year. Assessing results from the first half may help identify what went right, and what went wrong. Many investors may have missed the charge, and they keep hoping for stocks to retreat to go on a buying spree. Gaining a solid grasp on the markets may take years to truly figure out. Combining technical analysis and tracking fundamentals may provide a large boost of confidence to the investor. Being able to sift through the countless chatter may take some perseverance and extreme focus. Creating a winning portfolio might only be a few sharp trades away.
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 Computer Programs and Systems, Inc. (NasdaqGS:CPSI) is 7. 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, Computer Programs and Systems, Inc. (NasdaqGS:CPSI) has a Value Composite score of 40. 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 38.
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 Computer Programs and Systems, Inc. (NasdaqGS:CPSI) is 41.279200. 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 Computer Programs and Systems, Inc. (NasdaqGS:CPSI) is 30.299400. The Volatility 6m is the same, except measured over the course of six months. The Volatility 6m is 34.587400.
Computer Programs and Systems, Inc. (NasdaqGS:CPSI) currently has a Montier C-score of 3.00000. 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.
One of the most famous sayings in the stock market is “buy low, sell high”. This may seem like an oversimplified statement, but there are many novice investors who often do the complete opposite. Many investors may be looking too closely at stocks that have been on the rise, and they might not be checking on the underlying fundamental data. They may be hoping to ride the wave higher, but may end up shaking their heads. On the flip side, many investors may hold onto stocks for far too long after they have slipped drastically. Waiting for a bounce that may never come can cause frustration and plenty of second guessing. Successful investors are typically able to locate stocks that are undervalued at a certain price. This may take a lot of practice and dedication, but it may do wonders for the health of the portfolio.