Earnings

Choosing Between WMIH Corp. (WMIH) and Jaguar Health, Inc. (JAGX)

WMIH Corp. (NASDAQ:WMIH) shares are up more than 50.75% this year and recently increased 4.07% or $0.05 to settle at $1.28. Jaguar Health, Inc. (NASDAQ:JAGX), on the other hand, is up 1.47% year to date as of 02/14/2018. It currently trades at $0.14 and has returned 2.75% during the past week.

WMIH Corp. (NASDAQ:WMIH) and Jaguar Health, Inc. (NASDAQ:JAGX) are the two most active stocks in the market based on today’s trading volumes. To determine if one is a better investment than the other, we will compare the two companies’ growth, profitability, risk, return, and valuation characteristics, as well as their analyst ratings and sentiment signals.

Growth

The ability to consistently grow earnings at a high compound rate is a defining characteristic of the best companies for long-term investment. Comparatively, JAGX is expected to grow at a 40.00% annual rate. All else equal, JAGX’s higher growth rate would imply a greater potential for capital appreciation.



Profitability and Returns

Growth in and of itself is not necessarily valuable, and it can even be harmful to shareholders if companies overinvest in unprofitable projects in pursuit of that growth. We will use EBITDA margin and Return on Investment (ROI), which adjust for differences in capital structure, as measure of profitability and return. WMIH Corp. (WMIH) has an EBITDA margin of 509.8%. This suggests that WMIH underlying business is more profitable WMIH’s ROI is 0.00% while JAGX has a ROI of -978.10%. The interpretation is that WMIH’s business generates a higher return on investment than JAGX’s.

Cash Flow 




Earnings don’t always accurately reflect the amount of cash that a company brings in. WMIH’s free cash flow (“FCF”) per share for the trailing twelve months was -0.02. Comparatively, JAGX’s free cash flow per share was -. On a percent-of-sales basis, WMIH’s free cash flow was -0.08% while JAGX converted 0% of its revenues into cash flow. This means that, for a given level of sales, JAGX is able to generate more free cash flow for investors.

Liquidity and Financial Risk

WMIH’s debt-to-equity ratio is 0.00 versus a D/E of 0.51 for JAGX. JAGX is therefore the more solvent of the two companies, and has lower financial risk.

Valuation

WMIH trades at a P/B of 1.20, and a P/S of 35.81, compared to a P/B of 0.25, and a P/S of 5.57 for JAGX. Given that earnings are what matter most to investors, analysts tend to place a greater weight on the P/E.

Insider Activity and Investor Sentiment

Analysts often look at short interest, or the percentage of a company’s float currently being shorted by investors, to aid in their outlook for a particular stock. WMIH has a short ratio of 4.88 compared to a short interest of 0.86 for JAGX. This implies that the market is currently less bearish on the outlook for JAGX.

Summary

Jaguar Health, Inc. (NASDAQ:JAGX) beats WMIH Corp. (NASDAQ:WMIH) on a total of 8 of the 13 factors compared between the two stocks. JAGX is more profitable, has higher cash flow per share, has a higher cash conversion rate and higher liquidity. In terms of valuation, JAGX is the cheaper of the two stocks on book value and sales basis, Finally, JAGX has better sentiment signals based on short interest.

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