Browsing Category: "Stock Fundamentals"

Price To Tangible Book Value Backtest

Mar.23, 2012 in Stock Fundamentals 1 Comment

I recently reported on the results of my price-to-book ratio backtest. Shortly after running that backtest, I realized that many value investors probably actually prefer using price to tangible book value. The price to tangible book value ratio is simply the current price of the stock divided by the latest quarterly tangible book value per share. Tangible [...]

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Return on Invested Capital Variation Backtest

Mar.05, 2012 in Stock Fundamentals 2 Comments

Last Friday I asked my Twitter followers, “Which fundamental should I backtest next?” Andrew Martin replied. Here’s a copy of our conversation: @ACJMARTIN: @FatPitch ROC @FatPitch: @ACJMARTIN What’s your definition of ROC? @ACJMARTIN: @FatPitch it’s more like ROIC. Op profit + deprec + goodwill amort – tax – capex divide by total assets – cash. I used [...]

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Price-To-Book Ratio (P/B Ratio) Backtest

Mar.01, 2012 in Stock Fundamentals 3 Comments

The price-to-book ratio (P/B ratio) is a popular valuation ratio. It is calculated by taking the latest stock price and dividing it by book value per share.  Book value is simply the total assets found on the balance sheet minus  liabilities, which is referred to as common shareholder’s equity. To get book value per share [...]

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Returns by Market Capitalization Over the Past Decade

Feb.28, 2012 in Stock Fundamentals 1 Comment

Market capitalization is simply the total dollar value of all of a company’s outstanding shares of stock. It is often referred to as market cap for short. You can calculate market cap for a company by taking the current market price for a share of stock and multiplying it by the number of shares outstanding [...]

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Price to Current Fiscal Year Earnings Backtest

Feb.20, 2012 in Stock Fundamentals Leave a Comment

Another widely used valuation ratio that Richard Tortoriello examined in his book Quantitative Strategies for Achieving Alpha is the P/E ratio. It is probably the most recognizable and used stock valuation metric. There are several variations on this popular fundamental ratio, including using trailing twelve-month earnings per share, one-year forward earnings per share estimate, and the use of [...]

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Return on Enterprise Value (ROEV) Backtest

Jan.24, 2012 in Stock Fundamentals 8 Comments

Return on Enterprise Value (ROEV) is a stock valuation ratio that can be useful for comparing the values of different companies. It is simply net cash flow divided by enterprise value. Net cash flow is net profit plus amounts charged off for depreciation, depletion, and amortization. I was unfamiliar with this stock fundamental until Ken Faulkenberry [...]

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Enterprise Value to EBITDA Ratio Backtest

Jan.13, 2012 in Stock Fundamentals 14 Comments

The EBITDA to enterprise value (EV) ratio is a widely used valuation multiple to assess the relative value of companies. It is calculated by simply taking earnings before interest, taxes, depreciation and amortization (EBITDA) and dividing by enterprise value (EV). Of course, you need to know the definitions of both of those terms to really [...]

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