The shares of Turtle Beach Corporation have increased by more than 115.78% this year alone. The shares recently went up by 26.54% or $0.82 and now trades at $3.91. The shares of SINA Corporation (NASDAQ:SINA), has slumped by -6.92% year to date as of 04/13/2018. The shares currently trade at $93.37 and have been able to report a change of -3.42% over the past one week.
The stock of Turtle Beach Corporation and SINA Corporation 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. HEAR has an EBITDA margin of 7.56%, this implies that the underlying business of HEAR is more profitable. The ROI of HEAR is 21.30% while that of SINA is 8.10%. These figures suggest that HEAR ventures generate a higher ROI than that of SINA.Cash Flow
The value of a stock is ultimately determined by the amount of cash flow that the investors have available. Over the last 12 months, HEAR’s free cash flow per share is a negative -0.01, while that of SINA is positive 2.98.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 HEAR is 1.30 and that of SINA is 3.20. This implies that it is easier for HEAR to cover its immediate obligations over the next 12 months than SINA.Valuation
HEAR currently trades at a forward P/E of 86.89, and a P/S of 1.02 while SINA trades at a forward P/E of 19.36, a P/B of 2.35, and a P/S of 4.46. This means that looking at the earnings, book values and sales basis, HEAR 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 HEAR is currently at a 73.78% to its one-year price target of 2.25. Looking at its rival pricing, SINA is at a -37.81% relative to its price target of 150.14.
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), HEAR is given a 1.30 while 1.70 placed for SINA. This means that analysts are more bullish on the outlook for SINA 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 HEAR is 6.59 while that of SINA is just 2.54. This means that analysts are more bullish on the forecast for SINA stock.
The stock of SINA Corporation defeats that of Turtle Beach Corporation when the two are compared, with SINA taking 6 out of the total factors that were been considered. SINA 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, SINA is the cheaper one on an earnings, book value and sales basis. Finally, the sentiment signal for SINA is better on when it is viewed on short interest.