What Are The Quant Signals Telling Us About SENKO Group Holdings Co., Ltd. (TSE:9069), Carrols Restaurant Group, Inc. (NasdaqGS:TAST)?

In trying to determine the current valuation of SENKO Group Holdings Co., Ltd. (TSE:9069) shares, we note that the Book to Market ratio of the shares stands at 0.862313. 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.

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SENKO Group Holdings Co., Ltd. (TSE:9069) presently has a current ratio of 1.13. 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.

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 SENKO Group Holdings Co., Ltd. (TSE:9069) is 0.035512. 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.

SENKO Group Holdings Co., Ltd. (TSE:9069)’s Leverage Ratio was recently noted as 0.400485. This ratio is calculated by dividing total debt by total assets plus total assets previous year, divided by two. The leverage of a company is relative to the amount of debt on the balance sheet. This ratio is often viewed as one measure of the financial health of a firm.

ERP5 Rank

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 SENKO Group Holdings Co., Ltd. (TSE:9069) is 5770. The lower the ERP5 rank, the more undervalued a company is thought to be.

FCF Yield 5yr Avg

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 SENKO Group Holdings Co., Ltd. (TSE:9069) is -0.011795.

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 SENKO Group Holdings Co., Ltd. (TSE:9069) is currently 1.04492.  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.

Magic Formula

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 SENKO Group Holdings Co., Ltd. (TSE:9069) is 6530. 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”.

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 SENKO Group Holdings Co., Ltd. (TSE:9069) is 24.219200.  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 SENKO Group Holdings Co., Ltd. (TSE:9069) is 19.765800.  The Volatility 6m is the same, except measured over the course of six months.  The Volatility 6m is 23.234800.

Yield

After a recent scan, we can see that SENKO Group Holdings Co., Ltd. (TSE:9069) has a Shareholder Yield of 0.028959 and a Shareholder Yield (Mebane Faber) of -0.17711. 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.

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In taking a look at some key indicators for Carrols Restaurant Group, Inc. (NasdaqGS:TAST), we note that the current Book to Market value for the firm is at 0.511509. 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.

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Additional Tools

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 Carrols Restaurant Group, Inc. (NasdaqGS:TAST) is 0.013508.  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, Carrols Restaurant Group, Inc. (NasdaqGS:TAST)’s ROIC is 0.118105. The ROIC 5 year average is 0.086385 and the ROIC Quality ratio is 5.342521. 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, Carrols Restaurant Group, Inc. (NasdaqGS:TAST) currently has a value of 0.148698. This value is derived by dividing EBITDA by Enterprise Value.

The Current Ratio of Carrols Restaurant Group, Inc. (NasdaqGS:TAST) is 0.42. 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 Carrols Restaurant Group, Inc. (NasdaqGS:TAST) is 0.473812. 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.

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 Carrols Restaurant Group, Inc. (NasdaqGS:TAST) is 6. 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, Carrols Restaurant Group, Inc. (NasdaqGS:TAST) has a Value Composite score of 18. 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 28.

Volatility/C Score

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 Carrols Restaurant Group, Inc. (NasdaqGS:TAST) is 42.838300.  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 Carrols Restaurant Group, Inc. (NasdaqGS:TAST) is 42.523100.  The Volatility 6m is the same, except measured over the course of six months.  The Volatility 6m is 42.622800.

Carrols Restaurant Group, Inc. (NasdaqGS:TAST) 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.

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