The shares of OpGen, Inc. have increased by more than 0.05% this year alone. The shares recently went up by 8.29% or $0.02 and now trades at $0.19. The shares of Check-Cap Ltd. (NASDAQ:CHEK), has jumped by 4.62% year to date as of 01/16/2018. The shares currently trade at $0.91 and have been able to report a change of -1.08% over the past one week.
The stock of OpGen, Inc. and Check-Cap Ltd. were two of the most active stocks on Tuesday. 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. These figures suggest that CHEK ventures generate a higher ROI than that of OPGN.
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 OPGN is 1.20 and that of CHEK is 4.50. This implies that it is easier for OPGN to cover its immediate obligations over the next 12 months than CHEK. The debt ratio of OPGN is 0.37 compared to 0.00 for CHEK. OPGN can be able to settle its long-term debts and thus is a lower financial risk than CHEK.
OPGN currently trades at a P/B of 2.34, and a P/S of 3.11 while CHEK trades at a P/B of 2.94, This means that looking at the earnings, book values and sales basis, OPGN 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 OPGN is currently at a -87.33% to its one-year price target of 1.50. Looking at its rival pricing, CHEK is at a -77.97% relative to its price target of 4.13. This figure implies that over the next one year, CHEK 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), OPGN is given a 2.00 while 2.00 placed for CHEK. This means that analysts are equally bullish on their outlook for the two stocks 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 OPGN is 2.58 while that of CHEK is just 1.25. This means that analysts are more bullish on the forecast for CHEK stock.
The stock of OpGen, Inc. defeats that of Check-Cap Ltd. when the two are compared, with OPGN taking 3 out of the total factors that were been considered. OPGN 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, OPGN is the cheaper one on an earnings, book value and sales basis. Finally, the sentiment signal for OPGN is better on when it is viewed on short interest.