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Rating Change Detail - RAYTHEON COMPANY (RTN) - 1/27/2012
The stock was downgraded from Strong Interest to Some Interest on 1/27/2012 by the Earnings Yield Investor Strategy based on the principles of Joel Greenblatt. The score according to this strategy fell from 90% to 80%. A full detailed analysis of RTN using this strategy is included below. For a full detailed analysis of RTN using 12 proven strategies of Wall Street Legends, take a free trial to Validea.com

Detailed Analysis of RAYTHEON COMPANY (RTN)

Strategy: Earnings Yield Investor - Based on: Joel Greenblatt

EARNINGS YIELD: [NEUTRAL]

The first criterion that this strategy looks at is the earnings yield. The earnings yield is calculated by dividing a company's earnings before interest and taxes by its enterprise value, which includes not only the price of the company's shares, but also the amount of debt it uses to generate earnings. Greenblatt is really measuring how much of a return, or yield, you could expect to get if you were to buy the whole business-including all of its debt. Looking at a simple E/P ratio can be misleading, he says, because it doesn't take that debt into account. This methodology ranks all stocks based on their earnings yields and then combines that ranking with each firm's ranking based on its return on total capital to determine the strategy's level of interest. RTN's earnings yield is 15.99%, which ranks it 100 among the stocks in our database.

RETURN ON TOTAL CAPITAL: [NEUTRAL]

The second criterion that this strategy looks at is the return on total capital, which examines how well a firm utilizes the capital that it employs. Greenblatt calculates return on total capital by dividing a firm's earnings before interest and taxes (which is used instead of traditional earnings so that debt payments and taxes don't obscure how well the firm's actual operating business is doing) by its tangible capital employed, which is equal to net working capital plus net fixed assets. RTN's return on capital is 39.79%, which ranks it 232 among the stocks in our database.

FINAL RANKING: [PASS]

The final test of this strategy ranks each stock based on a combination of its ranking from the first two criteria. RTN ranks 54 among the stocks in our database, thus passing this criterion.

For a full detailed analysis of RTN using 12 proven strategies of Wall Street Legends,
take a free trial to Validea.com

Rating Change Detail - RAYTHEON COMPANY (RTN) - 1/27/2012

Detailed Analysis of RAYTHEON COMPANY (RTN)

Strategy: Earnings Yield Investor - Based on: Joel Greenblatt