Checking the Levels for Richelieu Hardware Ltd. (TSX:RCH)

Investors may be focusing on current ROIC (Return on Invested Capital) data for Richelieu Hardware Ltd. (TSX:RCH). ROIC is a popular financial metric that gauges how efficient a company is with earning cash flow through invested capital. A standard ROIC formula divides operating income, adjusted for its tax rate, by total debt plus shareholder equity minus cash. The goal of the ROIC calculation is to display how much new cash is generated from capital investments. Currently, Richelieu Hardware Ltd.’s ROIC is 0.307452. The ROIC 5 year average is 0.364735 and the ROIC Quality ratio is at 9.087986.

Richelieu Hardware Ltd. (TSX:RCH) has a Gross Margin (Marx) ratio of 0.194266. This number is based on the research by University of Rochester professor Robert Novy-Marx. Marx believed that a high gross income ratio was a sign of a quality company. Looking further, Richelieu Hardware Ltd. has a Gross Margin score of 2. This score is based on the Gross Margin (Marx) metric using a scale from 1 to 100 where a 1 would be seen as positive, and a 100 would be viewed as negative. Richelieu Hardware Ltd. (TSX:RCH) currently has an EV or Enterprise Value of 1528075. The EV is used to show how the market assigns value to a company as a whole. EV is essentially a modification of market cap, as it incorporates debt and cash for assessing a firm’s valuation. Monitoring EV may help when comparing companies with different capital structures. EV can help investors gain a truer sense of whether a company is undervalued or not.

Value Investors may be keeping an eye on the Magic Formula Rank or MF Rank for Richelieu Hardware Ltd. (TSX:RCH). Currently, Richelieu Hardware Ltd. has a MF Rank of 3647. The Magic Formula was created and popularized by Joel Greenblatt in his book “The Little Book That Beats the Market”. Greenblatt’s formula helps identify stocks that are priced attractively with a high earnings yield, or solid reported profits compared to the market value of the company. To spot opportunities in the equity market, investors may be checking for stocks that have the lowest combined MF Rank. Richelieu Hardware Ltd. (TSX:RCH) has a present Value Composite score of 46. This score falls on a scale from 0 to 100 where a lower score would indicate an undervalued company and a higher score would indicate an overvalued company. This ranking was created by James O’Shaughnessy using six different valuation ratios including price to book value, price to sales, EBITDA to EV, price to cash flow, price to earnings, and shareholder yield. Richelieu Hardware Ltd. (TSX:RCH) currently has an EV or Enterprise Value of 1528075. The EV is used to show how the market assigns value to a company as a whole. EV is essentially a modification of market cap, as it incorporates debt and cash for assessing a firm’s valuation. Monitoring EV may help when comparing companies with different capital structures. EV can help investors gain a truer sense of whether a company is undervalued or not.

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