The last two newsletters showed that Wynnstay’s shares (LSE:WYN) are selling cheaply compared with proven earnings over ten years and that it has some competitive advantages in the territories where it is the leading supplier. Wynnstay’s market capitalisation is £62.4m at £3.17 per share.
Piotroski Analysis
- Positive net income? Yes.
- Positive cash flow from operations? WYN has high cash flow (£12.8m).
- An increase in return on assets employed in the business from the previous year? No
- Cash flow greater than profit? Yes, so WYN scores a point here.
- Has the firm’s long-term debt reduced relative to its total assets? Long term debt is very low in both years. Nevertheless, no Piotroski point awarded.
- Has the firm’s current ratio improved? Again, respectable ratios in both years, but the position deteriorated therefore no Piotroski point.
- Has the firm avoided raising fresh equity capital in the last year? It has – a point.
- Has gross profit margin improved? A (small) deterioration therefore no Piotroski point.
- Has the ratio of turnover to total assets improved? Yes – one more Piotroski point.
A Piotroski score of 5 out of 9 is OK, indicating a relatively low likelihood of financial distress.
An analysis based on the half year to 30 April 2019 concluded with a 5 out of 9 score as well (points scored on the same items).
Balance sheet extracts (ignoring intangibles)
£m | 30th April 2019………………To read more subscribe to my premium newsletter Deep Value Shares – click here http://newsletters.advfn.com/deepvalueshares/subscribe-1
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31 Oct 2018 | 31 Oct 2017 | |||
Inventories | 46.5 | 52.3 |
………………To read more subscribe to my premium newsletter Deep Value Shares – click here http://newsletters.advfn.com/deepvalueshares/subscribe-1