Earnings Yield in Focus For Paramount Bed Holdings Co., Ltd. (TSE:7817), ARIAKE JAPAN Co., Ltd. (TSE:2815)

The EBITDA Yield is a great way to determine a company’s profitability.  This number is calculated by dividing a company’s earnings before interest, taxes, depreciation and amortization by the company’s enterprise value.  Enterprise Value is calculated by taking the market capitalization plus debt, minority interest and preferred shares, minus total cash and cash equivalents.  The EBITDA Yield for Paramount Bed Holdings Co., Ltd. (TSE:7817) is 0.145530.

Dealing with the ups and down of the stock market is something that most investors will encounter at some point. Everyone wants to feel that thrill of seeing that big winner soar, and nobody wants to see that loser keep sinking. Figuring out how to best approach the stock market can take up a lot of time and energy. There are many strategies that investors can use when purchasing stocks for the portfolio. Some of these strategies may be riskier than others. Determining a comfortable level of risk appetite may be highly important for the individual investor. It is important to remember that there are no guarantees in the stock market. New investors may have to learn that there is rarely any substitute for hard work and tireless research. Many investors jump in head first and find this out the hard way. Realizing that there is no guaranteed strategy for stock picking might help the investor stay focused and grounded while building up the portfolio. 

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 Paramount Bed Holdings Co., Ltd. (TSE:7817) 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.

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 Paramount Bed Holdings Co., Ltd. (TSE:7817) is 7.00000.  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.

Price Index

The Price Index is a ratio that indicates the return of a share price over a past period. The price index of Paramount Bed Holdings Co., Ltd. (TSE:7817) for last month was 1.04569. 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 Paramount Bed Holdings Co., Ltd. (TSE:7817) is 0.94374.

Another useful indicator to assist in detmining rank is the ERP5 Rank.  This 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 Paramount Bed Holdings Co., Ltd. (TSE:7817) is 3473.  The lower the ERP5 rank, the more undervalued a company is thought to be.

Looking further, 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 Paramount Bed Holdings Co., Ltd. (TSE:7817) is 3769.  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”.

Earnings Yield

The Earnings to Price yield of Paramount Bed Holdings Co., Ltd. TSE:7817 is 0.050430. 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 Paramount Bed Holdings Co., Ltd. TSE:7817 is 0.092090. 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 Paramount Bed Holdings Co., Ltd. (TSE:7817) is 0.088045.

ROIC

The Return on Invested Capital (aka ROIC) for Paramount Bed Holdings Co., Ltd. (TSE:7817) is 0.145167.  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 Paramount Bed Holdings Co., Ltd. (TSE:7817) is 15.477214.  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 Paramount Bed Holdings Co., Ltd. (TSE:7817) is 0.142500.

The Value Composite One (VC1) is a method that investors use to determine a company’s value.  The VC1 of Paramount Bed Holdings Co., Ltd. (TSE:7817) is 36.  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 Paramount Bed Holdings Co., Ltd. (TSE:7817) is 47.

Investors are typically searching far and wide for any little advantage they can get in the stock market. Short-term traders using technical analysis may be looking to score quick profits by capitalizing on the fluctuations of stock prices. There are many different technical indicators that traders can choose to study. Some traders may find an indicator that works great by itself. Others may use a combination of multiple indicators to help spot trends and patterns. Many active traders will keep a close eye on a particular stock when it is nearing a new high or new low that hasn’t been touched in some time. Studying historical stock price action may lend some insight into whether or not a stock is likely to break out past the new high, or plummet further to a much lower low. Staying on top of the action may be crucial when frequently entering and exiting trades.  

In terms of EBITDA Yield, ARIAKE JAPAN Co., Ltd. (TSE:2815) currently has a value of 0.076979. This value is derived by dividing EBITDA by Enterprise Value.

Investors may be trying to decide if it is the right time to enter the equity market. Stocks have been performing well of late, and investors may be eager to catch the next potential move higher. When looking to put money into the stock market, investors might be working hard to create a strategy and choose specific stocks to add to the portfolio. Building a strategy can be tough, but sticking to a strategy can be even tougher. Sticking to the game plan when markets are in flux can greatly improve the investor’s chances of succeeding in the market. 

Another useful indicator to assist in detmining rank is the ERP5 Rank.  This 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 ARIAKE JAPAN Co., Ltd. (TSE:2815) is 5105.  The lower the ERP5 rank, the more undervalued a company is thought to be.

Looking further, 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 ARIAKE JAPAN Co., Ltd. (TSE:2815) is 4162.  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”.

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 ARIAKE JAPAN Co., Ltd. (TSE:2815) 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.

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 ARIAKE JAPAN Co., Ltd. (TSE:2815) is 9.00000.  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.

The Price Index is a ratio that indicates the return of a share price over a past period. The price index of ARIAKE JAPAN Co., Ltd. (TSE:2815) for last month was 1.10707. 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 ARIAKE JAPAN Co., Ltd. (TSE:2815) is 0.74615.

Valuation

ARIAKE JAPAN Co., Ltd. (TSE:2815) presently has a current ratio of 5.87. 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 Value Composite One (VC1) is a method that investors use to determine a company’s value.  The VC1 of ARIAKE JAPAN Co., Ltd. (TSE:2815) is 56.  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 ARIAKE JAPAN Co., Ltd. (TSE:2815) is 52.

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 ARIAKE JAPAN Co., Ltd. TSE:2815 is 2.692579.  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 ARIAKE JAPAN Co., Ltd. (TSE:2815) 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 ARIAKE JAPAN Co., Ltd. (TSE:2815) is 28.511855. This ratio is found by taking the current share price and dividing by earnings per share.

FCF
The FCF Yield 5yr Average is calculated by taking the five year average free cash flow of a company, and dividing it by the current enterprise value.  Enterprise Value is calculated by taking the market capitalization plus debt, minority interest and preferred shares, minus total cash and cash equivalents.  The average FCF of a company is determined by looking at the cash generated by operations of the company.  The Free Cash Flow Yield 5 Year Average of ARIAKE JAPAN Co., Ltd. (TSE:2815) is 0.030924.

When dealing with the volatility and unpredictability of the stock market, investors may have to learn how to deal with their emotions. There are many factors that can have a big impact on the portfolio. Maintaining discipline can be one of the most important factors. From time to time, investors will be overcome by fear during a large market selloff. On the other side, investors may become extremely excited during a widespread market move to the upside. When these situations occur, investors tend to make better decisions if they are able to keep emotions out of play and stick to the original plan. Buying and selling at the wrong time can lead to portfolio underperformance, and it may damage investor confidence in the future.