Equity in Focus: Clayton Williams Energy, Inc. (NYSE:CWEI)

Investors may be examining some financial ratios for Clayton Williams Energy, Inc. (NYSE:CWEI). Currently, the company has a Gross Margin (Marx) ratio of 0.050526. This number is derived from the research by University of Rochester professor Robert Novy-Marx. Marx believed that a high gross income ratio was a sign of a high quality company. Digging a little deeper, Clayton Williams Energy, Inc. has a Gross Margin score of 47. This score is based on the Gross Margin (Marx) calculation using a scale from 1 to 100 where a 1 would be viewed as good, and a 100 would be seen as negative.

Investors may also be checking in on the status of Clayton Williams Energy, Inc. (NYSE:CWEI) shares. The company currently has an EV (Enterprise Value) of 2728464). Enterprise Value measures the complete value of a specific company. EV may often be used as a more comprehensive alternative to simply tracking the market cap of a firm. Enterprise Value is often used by value investors to help spot undervalued companies. EV is typically thought to be a more accurate calculation of total company value due to the inclusion of debt obligations.

Active market trackers might be watching Return on Invested Capital (ROIC) information on Clayton Williams Energy, Inc. (NYSE:CWEI). ROIC is a metric that can be used to assess the efficiency of a particular company at allocating controlled capital into investments that are profitable. ROIC can provide a good sense of how a company is using its money to generate returns. ROIC may provide the clearest view of just how efficient a company is at using its capital. Clayton Williams Energy, Inc. currently has an ROIC of -0.129777. The current ROIC 5 year average is 0.04106 and the ROIC Quality ratio is currently 3.749631.

Shifting gears, let’s take a look at the MF Rank (Magic Formula) on shares of Clayton Williams Energy, Inc. (NYSE:CWEI). After a recent look, Clayton Williams Energy, Inc. has an MF Rank of 12359. The Magic Formula was devised by hedge fund manager Joel Greenblatt. The formula was detailed in his book “The Little Book That Beats the Market”. The goal of the formula is to identify high quality companies that are trading at an attractive price. The formula uses ROIC and earnings yield ratios to help spot the undervalued quality stocks. The MF Rank combines the two ratios providing a ranking. Typically, companies with the lowest combined rank may be the higher quality selections.

Individual investors are always trying to stay on top of the stock markets. Finding opportunity may involve a lot of hard work and preparation. Investors are usually examining every piece of information available. This may entail keeping close watch on fundamental and technical data. Clayton Williams Energy, Inc. (NYSE:CWEI) has a current Value Composite Score of 90. Using a scale from 0 to 100, a lower score would represent an undervalued company and a higher score would indicate an expensive or overvalued company. This ranking was developed 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.

Leave a Comment