MEG Energy Corp. (TSX:MEG) Sees Its Target Weight Touch 0.01950

When investors are recalibrating their portfolios they should take a look at current volatility levels and the target weight calculation of a given stock.  MEG Energy Corp. (TSX:MEG) has a current target weight (% as a decimal) of 0.01950.  This means that any balanced portfolio should not be holding more than this percentage of stock within their holdings group.  This number is based on recent stock volatility for the past 100 days.

Knowledgeable investors are typically better prepared when deciding what stocks to buy. Having a deeper understanding of companies, sectors, and investment concepts may prove to be a huge boost to the investor’s confidence and profits. Savvy investors generally know how to stick with an investing plan but are able to adapt to any unforeseen market movements. Building lasting wealth is usually at the forefront of many investor strategies. It may be nearly impossible to find explanations for unusual market activity until long after everything has shifted and settled. Being able to take the punches from everyday market happenings may help the investor stay focused on the long-term objectives. As long as there are markets, there will always be news swirling around. There will constantly be talk of the bulls and the bears, market corrections, sell-offs, and such. Being able to wade through the headlines to get down to the nitty-gritty important stuff is where the market masters make their living. Being able to focus on the right information can be a gigantic boost to the health of the individual investor’s portfolio. Finding out what works and what doesn’t can also play big part in coming out on top in the stock market. Although it may not be an easy endeavor, it may be attainable with the right amount of perseverance and dedication.

50/200 Simple Moving Average Cross

MEG Energy Corp. (TSX:MEG) has a 1.04390 50/200 day moving average cross value. Cross SMA 50/200 (SMA = Simple Moving Average) and is calculated as follows:

Cross SMA 50/200 = 50 day moving average / 200day moving average. If the Cross SMA 50/200 value is greater than 1, it tell us that the 50 day moving average is above the 200 day moving average (golden cross), indicating an upward moving share price.

On the other hand if the Cross SMA 50/200 value is less than 1, this shows that the 50 day moving average is below the 200 day moving average (a death cross), and tells us that share prices has fallen recently and may continue to do so.

Returns and Margins

Taking look at some key returns and margins data we can note the following:

MEG Energy Corp. (TSX:MEG) has Return on Invested Capital of 0.043717, with a 5-year average of 0.003917 and an ROIC quality score of 1.359891. Why is ROIC important? It’s one of the most fundamental metrics in determining the value of a given stock. It helps potential investors determine if the firm is using it’s invested capital to return profits.

When it comes to investing, people are generally told to make sure that they don’t put all their eggs in one basket. This saying can apply to investing in the stock market as well. Keeping the stock portfolio diversified can greatly behoove the individual investor. When hard earned money is on the line, individuals may want to pay extra attention as to how their equity holdings are spread out. Many investors will choose to pick stocks that combine large cap, small cap, and even international stocks. Although stock portfolio diversification does not eliminate risk, it can help reduce it during tumultuous market conditions.

MEG Energy Corp. (TSX:MEG) of the Oil & Gas Producers sector closed the recent session at 5.500000 with a market value of $1244440.

In looking at some Debt ratios, MEG Energy Corp. (TSX:MEG) has a debt to equity ratio of 0.92607 and a Free Cash Flow to Debt ratio of 0.065059.  This ratio provides insight as to how high the firm’s total debt is compared to its free cash flow generated.  In terms of Net Debt to EBIT, that ratio stands at 10.43558.  This ratio reveals how easily a company is able to pay interest and capital on its net outstanding debt.  The lower the ratio the better as that indicates that the company is able to meet its interest and capital payments. Lastly we’ll take note of the Net Debt to Market Value ratio.  MEG Energy Corp.’s ND to MV current stands at 2.060041. This ratio is calculated as follows: Net debt (Total debt minus Cash ) / Market value of the company.

Drilling down into some additional key near-term indicators we note that the Capex to PPE ratio stands at 0.039946 for MEG Energy Corp. (TSX:MEG).  The Capex to PPE ratio shows you how capital intensive a company is. Stocks with an increasing (year over year) ratio may be moving to be more capital intensive and often underperform the market. Higher Capex also often means lower Free Cash Flow (Operating cash flow – Capex) generation and lower dividends as companies don’t have the cash to pay dividends if they are investing more in the business.

Accumulating knowledge about the stock market can be a big part of the investment planning process. Proper allocation of equity investments is also an important factor. Finding the proper mix of stocks may end up being more important than the single stocks added to the portfolio. Determining the correct asset allocation can depend on variables such as risk appetite and financial goals. These goals may be short-term, medium term, or longer-term. Investors will often have to determine how aggressive they will be when buying stocks. This can also depend on the overall time horizon and risk tolerance. Some investors might be unfazed by continuous market fluctuations. Others may be much more sensitive, and they may need to adjust their plans accordingly. 

In addition to Capex to PPE we can look at Cash Flow to Capex.  This ration compares a stock’s operating cash flow to its capital expenditure and can identify if a firm can generate enough cash to meet investment needs.  Investors are looking for a ratio greater than one, which indicates that the firm can meet that need. Comparing to other firms in the same industry is relevant for this ratio. MEG Energy Corp. (TSX:MEG)’s Cash Flow to Capex stands at 1.856109.

Near-Term Growth Drilldown

Now we’ll take a look at some key growth data as decimals. One year cash flow growth ratio is calculated on a trailing 12 months basis and is a one year percentage growth of a firm’s cash flow from operations.  This number stands at 0.29362 for MEG Energy Corp. (TSX:MEG).  The one year Growth EBIT ratio stands at 1.90455 and is a calculation of one year growth in earnings before interest and taxes.  The one year EBITDA growth number stands at 0.48040 which is calculated similarly to EBIT Growth with just the addition of amortization.

Taking even a further look we note that the 1 year Free Cash Flow (FCF) Growth is at -0.25139.  The one year growth in Net Profit after Tax is -6.09057 and lastly sales growth was 0.16506.

As many veteran investors have already seen, market movements are extremely hard to accurately predict. Financial news outlets are always producing headlines and offering predictions for future market performance. Sometimes the predictions are right, and sometimes the predictions are wrong. Investors may have a hard time separating fact from fiction when it comes to bullish and bearish sentiment. Adjusting the portfolio based strictly on headlines can be tempting for the amateur investor. Filtering out the noise and focusing on the pertinent data can help keep the individual focused and on track. Straying from the plan and basing investment decisions on news headlines may lead to portfolio confusion down the road. Crunching the numbers and paying attention to the important economic data can greatly help the investor see through the smoke when markets get muddled.

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