Market Survey: Checking on Shares of Reed’s, Inc. (AMEX:REED)

Market investors might be taking a second look at shares of Reed’s, Inc. (AMEX:REED). The company currently has a Gross Margin (Marx) ratio of 0.489949. Robert Novy-Marx has provided investors with insights on finding high-quality value stocks. Marx pointed to a high gross income ratio defining the quality of a company. Reed’s, Inc. has a Gross Margin score of 17. The Gross Margin score lands between 1 and 100 where a score of 1 would be seen as good, and a score of 100 would be considered bad. This score is based on the Gross Margin stability and growth over the previous 8 years.

Focusing in further, Reed’s, Inc. (AMEX:REED) has an EV (Enterprise Value) of 69000. EV represents the total economic value of a specific company. EV is considered to gauge the theoretical takeover price if a company was to be acquired. EV takes into account more than just the outstanding equity. Debt and cash can have a big impact on a firm’s Enterprise Value. Although two companies may have the same market cap, they may have highly different EV values.

Investors searching for value in the stock market may be checking on the Magic Formula Rank or MF Rank for Reed’s, Inc. (AMEX:REED). Reed’s, Inc. currently has a MF Rank of 11948. The Magic Formula was devised and made popular by Joel Greenblatt in his book “The Little Book That Beats the Market”. Greenblatt’s formula helps seek out stocks that are priced attractively with a high earnings yield, or solid reported profits in comparison to the market value of the company. To spot opportunities in the market, investors may be looking at stocks that have the lowest combined MF Rank.

Investors are always on the look-out for the next great trading opportunity. Spotting the next winner to pad the portfolio may involve diligent work and a touch of market magic. Analyzing the sea of information about public companies can be a scary task. Many sharp investors will approach the equity markets from many different angles. This may include keeping close tabs on fundamental and technical data. Reed’s, Inc. (AMEX:REED) has a present Value Composite score of 78. 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.

We can now shift the focus to some current ROIC (Return on Invested Capital) data for Reed’s, Inc. (AMEX:REED). ROIC is a commonly used financial metric that measures how efficient a company is with earning cash flow through invested capital. A typical ROIC calculation divides operating income, adjusted for its tax rate, by total debt plus shareholder equity minus cash. The aim of the ROIC calculation is to show how much new cash is generated from capital investments. After a recent check, Reed’s, Inc.’s ROIC is -0.208626. The ROIC 5 year average is -0.084302 and the ROIC Quality ratio is at 0.592047.

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