The Return on Invested Capital (aka ROIC) Score for TransAlta Corporation (TSX:TA) is 6.546078. 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. 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).
Strictly technical traders typically don’t pay a whole lot of attention to fundamental factors such as value, competition, or company management. Technical analysts want to figure out trends based on indicators, charts, and prior price data. These types of traders are usually highly active and hold positions for short periods of time in order to capitalize on short-term price fluctuations. Active traders may be quick to unload a position if it does not pan out as expected. Technicians often pay a great deal of attention to support and resistance levels. These are levels where traders believe a specific stock will either see a bounce or a pullback.
We can now take a quick look at some historical stock price index data. TransAlta Corporation (TSX:TA) presently has a 10 month price index of 1.25358. 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 1.18243, the 24 month is 1.18170, and the 36 month is 1.50915. Narrowing in a bit closer, the 5 month price index is 0.89014, the 3 month is 0.98968, and the 1 month is currently 1.03230.
TransAlta Corporation (TSX:TA) has a Price to Book ratio of 1.264974. 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 3.843038, and a current Price to Earnings ratio of -8.882626. The P/E ratio is one of the most common ratios used for figuring out whether a company is overvalued or undervalued.
Checking in on some valuation rankings, TransAlta Corporation (TSX:TA) has a Value Composite score of 33. 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 29.
Return on Assets
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 TransAlta Corporation (TSX:TA) is -0.028458. 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.
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The ERP5 Rank 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 TransAlta Corporation (TSX:TA) is 10872. The lower the ERP5 rank, the more undervalued a company is thought to be.
The Leverage Ratio of TransAlta Corporation (TSX:TA) is 0.358770. 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.
Watching some historical volatility numbers on shares of TransAlta Corporation (TSX:TA), we can see that the 12 month volatility is presently 28.203300. The 6 month volatility is 25.736200, and the 3 month is spotted at 26.556800. 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.
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 TransAlta Corporation (TSX:TA) is 23.00000. 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 M-Score, conceived by accounting professor Messod Beneish, is a model for detecting whether a company has manipulated their earnings numbers or not. TransAlta Corporation (TSX:TA) has an M-Score of -999.000000. The M-Score is based on 8 different variables: Days’ sales in receivables index, Gross Margin Index, Asset Quality Index, Sales Growth Index, Depreciation Index, Sales, General and Administrative expenses Index, Leverage Index and Total Accruals to Total Assets. A score higher than -1.78 is an indicator that the company might be manipulating their numbers.
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 TransAlta Corporation (TSX:TA) is 5. 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.
There are plenty of technical indicators that traders can choose to follow. With so many different signals to follow, traders may choose to focus on a small number of indicators to start. Many technical analysts will use a combination of different signals in order to help identify the best entry and exit points of a trade. Becoming a master at spotting trends and creating charts may seem impossible for the novice investor. Taking the time to fully understand the methods behind the indicators may help the trader with trying to sort everything out. Studying up on the theory behind some of the more popular indicators may help the trader understand exactly what they are doing when setting up their charts.