The shares of Frank’s International N.V. have decreased by more than -47.20% this year alone. The shares recently went up by 4.33% or $0.27 and now trades at $6.50. The shares of Core Laboratories N.V. (NYSE:CLB), has slumped by -12.50% year to date as of 12/01/2017. The shares currently trade at $105.04 and have been able to report a change of 3.42% over the past one week.
The stock of Frank’s International N.V. and Core Laboratories N.V. were two of the most active stocks on Friday. Investors seem to be very interested in what happens to the stocks of these two companies but do investors favor one over the other? We will analyze the growth, profitability, risk, valuation, and insider trends of both companies and see which one investors prefer.
Profitability and Returns
Growth alone cannot be used to see if the company will be valuable. Shareholders will be the losers if a company invest in ventures that aren’t profitable enough to support upbeat growth. In order for us to accurately measure profitability and return, we will be using the EBITDA margin and Return on Investment (ROI), which balances the difference in capital structure. FI has an EBITDA margin of 9.4%, this implies that the underlying business of CLB is more profitable. The ROI of FI is -11.60% while that of CLB is 20.50%. These figures suggest that CLB ventures generate a higher ROI than that of FI.
The value of a stock is ultimately determined by the amount of cash flow that the investors have available. Over the last 12 months, FI’s free cash flow per share is a positive 0.
Liquidity and Financial Risk
The ability of a company to meet up with its short-term obligations and be able to clear its longer-term debts is measured using Liquidity and leverage ratios. The current ratio for FI is 5.50 and that of CLB is 2.20. This implies that it is easier for FI to cover its immediate obligations over the next 12 months than CLB. The debt ratio of FI is 0.00 compared to 1.57 for CLB. CLB can be able to settle its long-term debts and thus is a lower financial risk than FI.
FI currently trades at a P/B of 1.18, and a P/S of 3.22 while CLB trades at a forward P/E of 38.62, a P/B of 31.08, and a P/S of 7.19. This means that looking at the earnings, book values and sales basis, FI is the cheaper one. It is very obvious that earnings are the most important factors to investors, thus analysts are most likely to place their bet on the P/E.
Analyst Price Targets and Opinions
The mistake some people make is that they think a cheap stock has more value to it. In order to know the value of a stock, there is need to compare its current price to its likely trading price in the future. The price of FI is currently at a -12.99% to its one-year price target of 7.47. Looking at its rival pricing, CLB is at a -4.86% relative to its price target of 110.40. This figure implies that over the next one year, CLB is a better investment.
When looking at the investment recommendation on say a scale of 1 to 5 (1 being a strong buy, 3 a hold, and 5 a sell), FI is given a 3.30 while 2.40 placed for CLB. This means that analysts are more bullish on the outlook for FI stocks.
Insider Activity and Investor Sentiment
Short interest or otherwise called the percentage of a stock’s tradable shares currently being shorted is another data that investors use to get a handle on sentiment. The short ratio for FI is 11.18 while that of CLB is just 16.27. This means that analysts are more bullish on the forecast for FI stock.
The stock of Core Laboratories N.V. defeats that of Frank’s International N.V. when the two are compared, with CLB taking 4 out of the total factors that were been considered. CLB happens to be more profitable, generates a higher ROI, has higher cash flow per share, higher liquidity and has a lower financial risk. When looking at the stock valuation, CLB is the cheaper one on an earnings, book value and sales basis. Finally, the sentiment signal for CLB is better on when it is viewed on short interest.