MYnd Analytics, Inc. (NASDAQ:MYND) shares are down more than -44.71% this year and recently decreased -4.57% or -$0.09 to settle at $1.88. Navios Maritime Holdings Inc. (NYSE:NM), on the other hand, is down -40.84% year to date as of 04/13/2018. It currently trades at $0.71 and has returned -2.78% during the past week.
MYnd Analytics, Inc. (NASDAQ:MYND) and Navios Maritime Holdings Inc. (NYSE:NM) are the two most active stocks in the Diagnostics & Research industry based on today’s trading volumes. We will compare the two companies based on the strength of various metrics, including growth, profitability, risk, return, and valuation to determine if one is a better investment than the other.Growth
The ability to grow earnings at a compound rate over time is a crucial determinant of investment value. Comparatively, NM is expected to grow at a 16.00% annual rate. All else equal, NM’s higher growth rate would imply a greater potential for capital appreciation.Profitability and Returns
Just, if not more, important than the growth rate is the quality of that growth. Growth can actual be harmful to investors if it comes at the cost of weak profitability and low returns. To adjust for differences in capital structure we’ll use Return on Investment (ROI) as measures of profitability and return. MYND’s ROI is -157.90% while NM has a ROI of 0.50%. The interpretation is that NM’s business generates a higher return on investment than MYND’s.Cash Flow
If there’s one thing investors care more about than earnings, it’s cash flow. MYND’s free cash flow (“FCF”) per share for the trailing twelve months was -0.57. Comparatively, NM’s free cash flow per share was -0.12. On a percent-of-sales basis, MYND’s free cash flow was -1.91% while NM converted -0% of its revenues into cash flow. This means that, for a given level of sales, NM is able to generate more free cash flow for investors.Liquidity and Financial Risk
Analysts look at liquidity and leverage ratios to assess how easily a company can cover its liabilities. MYND has a current ratio of 1.60 compared to 1.00 for NM. This means that MYND can more easily cover its most immediate liabilities over the next twelve months. MYND’s debt-to-equity ratio is 0.29 versus a D/E of 2.80 for NM. NM is therefore the more solvent of the two companies, and has lower financial risk.Valuation
MYND trades at a forward P/E of 2.08, a P/B of 3.84, and a P/S of 42.96, compared to a forward P/E of 6.07, a P/B of 0.15, and a P/S of 0.19 for NM. MYND is the cheaper of the two stocks on an earnings basis but is expensive in terms of P/B and P/S ratio. Given that earnings are what matter most to investors, analysts tend to place a greater weight on the P/E.
Analyst Price Targets and Opinions
When investing it’s crucial to distinguish between price and value. As Warren Buffet said, “price is what you pay, value is what you get”. MYND is currently priced at a -76.5% to its one-year price target of 8.00. Comparatively, NM is -43.2% relative to its price target of 1.25. This suggests that MYND is the better investment over the next year.
Risk and Volatility
Analyst use beta to measure a stock’s volatility relative to the overall market. Stocks with a beta above 1 tend to have bigger swings in price than the market as a whole, the opposite being the case for stocks with a beta below 1. MYND has a beta of 0.23 and NM’s beta is 2.70. MYND’s shares are therefore the less volatile of the two stocks.Insider Activity and Investor Sentiment
Comparing the number of shares sold short to the float is a method analysts often use to get a reading on investor sentiment. MYND has a short ratio of 0.30 compared to a short interest of 5.41 for NM. This implies that the market is currently less bearish on the outlook for MYND.Summary
MYnd Analytics, Inc. (NASDAQ:MYND) beats Navios Maritime Holdings Inc. (NYSE:NM) on a total of 7 of the 14 factors compared between the two stocks. MYND higher liquidity and has lower financial risk. MYND is more undervalued relative to its price target. Finally, MYND has better sentiment signals based on short interest.