Noranda Income Fund (TSX:NIF.UN) and Peregrine Diamonds Ltd. (TSX:PGD): Technical Valuation Breakdown

Noranda Income Fund (TSX:NIF.UN) currently has a Value Composite score of 7.  Similarly, the Value Composite Two (VC2) is calculated with the same ratios, but adds the Shareholder Yield.  The Value Composite Two of Noranda Income Fund (TSX:NIF.UN) is 11.

Technicals

Active investing may be highly stressful at times. Investors often set up trades with the best intentions, but have the tendency to let too much emotion seep into the situation. When dealing with the emotions of market stress, investors may need to figure out how to keep emotions in check in order to make the right decision. This may come easy to some but much harder for others. Because there is no one right way to trade, investors may have to experience certain scenarios for themselves. Creating a plan from the outset may help the investor when tough decisions need to be made. Keeping cool under pressure is a trait shared by many successful investors. When the investor is focused on a plan or specific trading system, this can make things a bit easier when times get tough.

In taking a look at some other notable technicals, Noranda Income Fund (TSX:NIF.UN)’s ROIC is 0.210068. The ROIC 5 year average is 0.198595 and the ROIC Quality ratio is 6.282246. 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.

We also note that Noranda Income Fund (TSX:NIF.UN) has a Shareholder Yield of 0.000000 and a Shareholder Yield (Mebane Faber) of -0.24568. 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.

Noranda Income Fund (TSX:NIF.UN) has a current MF Rank of 854. 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.

We can now take a quick look at some historical stock price index data. Noranda Income Fund (TSX:NIF.UN) presently has a 10 month price index of 0.68240. 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 0.65600, the 24 month is 0.73453, and the 36 month is 0.49645. Narrowing in a bit closer, the 5 month price index is 1.06207, the 3 month is 1.25203, and the 1 month is currently 1.02667.

The C-Score is a system developed by James Montier that helps determine whether a company is involved in falsifying their financial statements.  The C-Score is calculated by a variety of items, including a growing difference in net income verse cash flow, increasing days outstanding, growing days sales of inventory, increasing assets to sales, declines in depreciation, and high total asset growth.  The C-Score of Noranda Income Fund (TSX:NIF.UN) is 3.00000.  The score ranges on a scale of -1 to 6.  If the score is -1, then there is not enough information to determine the C-Score.  If the number is at zero (0) then there is no evidence of fraudulent book cooking, whereas a number of 6 indicates a high likelihood of fraudulent activity. The C-Score assists investors in assessing the likelihood of a company cheating in the books.

Taking a look at valuation rankings for Peregrine Diamonds Ltd. (TSX:PGD), we see that the stock has a Value Composite score of 85. Adding a sixth ratio, shareholder yield, we can view the Value Composite 2 score which is currently sitting at 82.

Trading the stock market can sometimes feel like a wild roller coaster ride. When stocks are soaring, investors may feel like they can’t lose. When markets are sinking, investors may feel like there is nothing that they can do. Individual investors may have experienced both ends of the spectrum. Sometimes, an investor may secure some winning trades right out of the gate. This may cause the individual to become overconfident in their ability. Markets have the ability to shoot down overconfidence very quickly. On the other side, investors may only experience losses right off the bat and become highly discouraged. Figuring out how to manage winners and losers can big a big help to the investor’s psyche in the long-term. Frequently assessing which trades worked and examining why they worked may greatly assist the investor. The same can be said for trades that did not pan out. 

Technicals at a Glance
In taking a look at some other notable technicals, Peregrine Diamonds Ltd. (TSX:PGD)’s ROIC is -1.043708. The ROIC 5 year average is -1.909403 and the ROIC Quality ratio is -0.510918. 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.

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 Peregrine Diamonds Ltd. (TSX:PGD) is -0.534719.  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.

Shareholder Yield
We also note that Peregrine Diamonds Ltd. (TSX:PGD) has a Shareholder Yield of -0.000737 and a Shareholder Yield (Mebane Faber) of -0.31347. 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.

Peregrine Diamonds Ltd. (TSX:PGD) has a current MF Rank of 14379. 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.

Price Index
We can now take aquick look at some historical stock price index data. Peregrine Diamonds Ltd. (TSX:PGD) presently has a 10 month price index of 0.65000. 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 0.60465, the 24 month is 0.76471, and the 36 month is 0.57778. Narrowing in a bit closer, the 5 month price index is 0.68421, the 3 month is 0.81250, and the 1 month is currently 1.08333.

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 Peregrine Diamonds Ltd. (TSX:PGD) is 2.  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.

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