Checking The 7.00000 Gross Margin Score on Motorola Solutions, Inc. (NYSE:MSI)

Investors having Motorola Solutions, Inc. (NYSE:MSI) on their watchlists might want to take into consideration the Gross Margin Score of the firm. Motorola Solutions, Inc. currently has a score of 7.00000. 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.  The low score of 7.00000 for Motorola Solutions, Inc. indicates a top score for stability and growth.

Investors are frequently looking for any possible way to get a leg up in the market. This may involve committing to plan that will hopefully outperform the market and maximize profits. Many investors will choose to employ top-down analysis. Top-down analysis involves examining the big picture of the economy and the world of finance. After studying global economic conditions, investors may then analyze different sectors that are possibly well positioned to beat the market. After identifying the sector or sectors, investors may then do further analysis of stocks within the specific industry in order to find firms that are successful and primed for growth. Other individual investors may choose to go with bottom-up analysis when looking for stock to add to the portfolio. The bottom-up approach takes the emphasis off of the power and significance of market and economic cycles. Investors may focus on individual companies and not worry so much about the specific industry or economy in general. 

Checking in on some valuation rankings, Motorola Solutions, Inc. (NYSE:MSI) has a Value Composite score of 65. 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 56.

In trying to determine the current valuation of Motorola Solutions, Inc. (NYSE:MSI) shares, we note that the Book to Market ratio of the shares stands at -0.072894. It’s commonly accepted that a Book to Market ratio greater than one indicates that the shares might be undervalued.  The book to market ratio has some limitations in certain industries however where intangible assets (such as knowledge) often are not represented on a balance sheet. The ratio is calculated by dividing the market price per share by book value per share.  

At the time of writing, Motorola Solutions, Inc. (NYSE:MSI) has a Piotroski F-Score of 5. The F-Score may help discover companies with strengthening balance sheets. The score may also be used to spot the weak performers. Joseph Piotroski developed the F-Score which employs nine different variables based on the company financial statement. A single point is assigned to each test that a stock passes. Typically, a stock scoring an 8 or 9 would be seen as strong. On the other end, a stock with a score from 0-2 would be viewed as weak.

Motorola Solutions, Inc. (NYSE:MSI) has a current ERP5 Rank of 7470 . The ERP5 Rank may assist investors with spotting companies that are undervalued. This ranking uses four ratios. These ratios are Earnings Yield, ROIC, Price to Book, and 5 year average ROIC. When looking at the ERP5 ranking, it is generally considered the lower the value, the better.

When dealing with the equity markets, investors are often tasked with trying to find stocks that are bound for glory. Every investor dreams of finding those stocks that were overlooked but are poised to pick up momentum. New investors are often instructed to set goals before starting to invest. Creating attainable, realistic goals can be a good starting point before digging into the investment trenches. After setting up goals considering financial status, objectives, timeframes and risk appetite, the next step may involve creating an actionable plan. Once the plan is in place, it may be extremely important to routinely monitor the performance of the portfolio. There are often many well crafted investment plans that for whatever reason don’t seem to be working out properly. Being able to evaluate and adjust the plan based on market activity may end up being the difference between a winning or losing portfolio. Being able to adapt to the fast paced and often times tumultuous market landscape can be a gigantic benefit for long-term portfolio health.

Ever wonder how investors predict positive share price momentum?  The Cross SMA 50/200, also known as the “Golden Cross” is the fifty day moving average divided by the two hundred day moving average.  The SMA 50/200 for Motorola Solutions, Inc. (NYSE:MSI) is currently 0.98050.  If the Golden Cross is greater than 1, then the 50 day moving average is above the 200 day moving average – indicating a positive share price momentum.  If the Golden Cross is less than 1, then the 50 day moving average is below the 200 day moving average, indicating that the price might drop.

The Leverage Ratio of Motorola Solutions, Inc. (NYSE:MSI) is 0.617940.  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.

ROA & ROIC

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 Motorola Solutions, Inc. (NYSE:MSI) is -0.003597.  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 Return on Invested Capital (aka ROIC) for Motorola Solutions, Inc. (NYSE:MSI) is 0.469872.  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 Motorola Solutions, Inc. (NYSE:MSI) is 1.877799.  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 Motorola Solutions, Inc. (NYSE:MSI) is 0.192397.

Investors are constantly trying to make smarter decisions when it comes to dealing with the stock market. There are so many choices out there that it may become completely overwhelming at first. Starting with a baseline approach can help ease the burden of too much information. Developing the proper investment knowledge may take a lot of time and effort. Many investors may find out the hard way that shortcuts are not the answer to achieving long-term success in the stock market. Many people may occasionally get lucky and think they can do no wrong. Over time, this type of investor may see profits start to shrink and losses start to pile up. Many investors are bombarded with hot investment tips. It can be very tempting to take advice from someone who has actually made money in the markets previously. However, the old adage remains the same; past results may not indicate future results. Thinking that something that has worked in the past will no doubt work in the future can be a recipe for portfolio disaster. Individual investors who do their own thorough research should be much better positioned to make the proper decisions when the time comes.