Is Celgene Corporation (NasdaqGS:CELG) Attractively Priced with a MF of 1201?

The MF Rank developed by hedge fund manager Joel Greenblatt, is intended spot high quality companies that are trading at an attractive price. The formula uses ROIC and earnings yield ratios to find quality, undervalued stocks. In general, companies with the lowest combined rank may be the higher quality picks. Celgene Corporation (NasdaqGS:CELG) has a current MF Rank of 1201. 
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Free Cash Flow Growth (FCF Growth) is the free cash flow of the current year minus the free cash flow from the previous year, divided by last year’s free cash flow.  The FCF Growth of Celgene Corporation (NasdaqGS:CELG) is 0.951870.  Free cash flow (FCF) is the cash produced by the company minus capital expenditure.  This cash is what a company uses to meet its financial obligations, such as making payments on debt or to pay out dividends.  The Free Cash Flow Score (FCF Score) is a helpful tool in calculating the free cash flow growth with free cash flow stability – this gives investors the overall quality of the free cash flow.  The FCF Score of Celgene Corporation (NasdaqGS:CELG) is 1.293837.  Experts say the higher the value, the better, as it means that the free cash flow is high, or the variability of free cash flow is low or both.

Investors may be interested in viewing the Gross Margin score on shares of Celgene Corporation (NasdaqGS:CELG). The name currently has a score of 19.00000. 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 Return on Invested Capital (aka ROIC) for Celgene Corporation (NasdaqGS:CELG) is 1.079582.  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 Celgene Corporation (NasdaqGS:CELG) is 5.337377.  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 Celgene Corporation (NasdaqGS:CELG) is 0.814119.

Shareholder Yield

The Shareholder Yield is a way that investors can see how much money shareholders are receiving from a company through a combination of dividends, share repurchases and debt reduction.  The Shareholder Yield of Celgene Corporation (NasdaqGS:CELG) is 0.066234.  This percentage is calculated by adding the dividend yield plus the percentage of shares repurchased.  Dividends are a common way that companies distribute cash to their shareholders.  Similarly, cash repurchases and a reduction of debt can increase the shareholder value, too.  Another way to determine the effectiveness of a company’s distributions is by looking at the Shareholder yield (Mebane Faber).  The Shareholder Yield (Mebane Faber) of Celgene Corporation NasdaqGS:CELG is 0.02210.  This number is calculated by looking at the sum of the dividend yield plus percentage of sales repurchased and net debt repaid yield.

The Value Composite One (VC1) is a method that investors use to determine a company’s value.  The VC1 of Celgene Corporation (NasdaqGS:CELG) is 45.  A company with a value of 0 is thought to be an undervalued company, while a company with a value of 100 is considered an overvalued company.  The VC1 is calculated using the price to book value, price to sales, EBITDA to EV, price to cash flow, and price to earnings.  Similarly, the Value Composite Two (VC2) is calculated with the same ratios, but adds the Shareholder Yield.  The Value Composite Two of Celgene Corporation (NasdaqGS:CELG) is 35.

Key Ratios

Celgene Corporation (NasdaqGS:CELG) presently has a current ratio of 2.78. 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.

Celgene Corporation (NasdaqGS:CELG)’s Leverage Ratio was recently noted as 0.570510. 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.

The Price to book ratio is the current share price of a company divided by the book value per share.  The Price to Book ratio for Celgene Corporation NasdaqGS:CELG is 8.083924.  A lower price to book ratio indicates that the stock might be undervalued.  Similarly, Price to cash flow ratio is another helpful ratio in determining a company’s value.  The Price to Cash Flow for Celgene Corporation (NasdaqGS:CELG) is 9.467188.  This ratio is calculated by dividing the market value of a company by cash from operating activities.  Additionally, the price to earnings ratio is another popular way for analysts and investors to determine a company’s profitability.  The price to earnings ratio for Celgene Corporation (NasdaqGS:CELG) is 13.910482. This ratio is found by taking the current share price and dividing by earnings per share.

When putting hard earned money at risk, investors will want to look at all the angles in order to make sure that no stone is left unturned when building the stock portfolio. With so many different stocks available to trade, investors may need to figure out a way to make the selection process manageable. Some investors may choose to start with industry research first and eventually filter down to individual stock picks. Others may want to start at the individual stock level and go from there. Whatever the approach the investor chooses, putting in the time and effort might greatly help the long-term performance of the stock portfolio.

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