According to the All-in-a single Screener, a High quality attribute of GuruFocus, 4 Peter Lynch Advancement shares with superior funds-to-personal debt ratios are Caledonia Mining Corp. PLC (CMCL), Humana Inc. (NYSE:HUM), Jewett-Cameron Buying and selling Co. Ltd. (NASDAQ:JCTCF) and Worthington Industries Inc. (NYSE:WOR).
The Peter Lynch Development Monitor utilizes the Fidelity Magellan Fund manager’s concept that one particular can assess a company’s cost line to an earnings line at 15 occasions earnings to figure out if a stock is overvalued or undervalued. Shares with a price-earnings ratio of significantly less than 15 are regarded as undervalued dependent on Lynch’s “fast” valuation method.
Other crucial conditions for the Peter Lynch Development Display include things like a GuruFocus business predictability rank of at the very least two stars and a 10-year earnings progress price of at the very least 6%. Additionally, the Screener excludes industries like cyclical retail and financial institutions: Lynch warned that for cyclical organizations, cost-earnings ratios might be artificially small in the course of peaks of business cycles thanks to higher net gain margins.
Dollars-to-personal debt ratio has high correlation with stock return
GuruFocus’ filter ranking element selects the Screener filters that have the highest correlation with 12-thirty day period stock returns. The eco-friendly “thumbs up” icon future to a Screener filter implies that the said filter has a sturdy correlation with stock returns.
For illustration, the hard cash-to-financial debt ratio, just one of quite a few actions of economical energy, has a good correlation with stock returns with a filter rank of 10. The correlation analysis suggests that the higher a company’s hard cash-to-credit card debt ratio, the bigger the company’s inventory return.
Caledonia Mining explores for, develops and mines gold principally in the South Africa and Zimbabwe areas. GuruFocus ranks the firm’s monetary power 9 out of 10 on various beneficial investing indicators, which include things like a funds-to-financial debt ratio earlier mentioned 40, a higher Piotroski F-score of 7, a solid Altman Z-score of 7.86 and a Beneish M-score that implies negligible earnings manipulation.
Jim Simons (Trades, Portfolio)’ Renaissance Technologies has a keeping in Caledonia Mining.
Humana provides Medicare Advantage programs for folks and groups. GuruFocus ranks the company’s economical energy 6 out of 10: Even though equity-to-asset and debt-to-equity ratios languish all around the marketplace-median ratios, Humana has a higher Piotroski F-rating of 9, a hard cash-to-credit card debt ratio of 1 and an desire coverage ratio that is near a 10-12 months high and outperforms above 82% of world opponents.
Gurus with significant holdings in Humana incorporate Steve Mandel (Trades, Portfolio)’s Lone Pine Cash and the Vanguard Health Care Fund (Trades, Portfolio).
Jewett-Cameron engages in wholesale distribution of wooden, lawn, yard and pet solutions. GuruFocus ranks the North Plains, Oregon-centered firm’s fiscal power 8 out of 10 on numerous good investing signs, which contain a potent Altman Z-score of 9.24 and hard cash-to-financial debt, fairness-to-asset and financial debt-to-equity ratios outperforming in excess of 88% of world wide competitors.
Worthington Industries manufactures worth-added metal processing and metallic products and solutions. GuruFocus ranks the company’s monetary strength 6 out of 10: The organization has an previously mentioned-average money-to-personal debt ratio, a significant Piotroski F-rating of 7 and a potent Altman Z-rating of 3.76 inspite of equity-to-asset, credit card debt-to-fairness and interest coverage ratios underperforming in excess of 66% of world wide rivals.
Disclosure: No positions.
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About the creator:
I am an editorial researcher at GuruFocus. I have a Master’s in Finance from SMU, and I love creating stories on money tendencies and trader portfolios. Stick to me on Twitter at @JamesLiGuru!