The shares of ConocoPhillips have increased by more than 27.25% this year alone. The shares recently went down by -0.34% or -$0.24 and now trades at $69.85. The shares of Take-Two Interactive Software, Inc. (NASDAQ:TTWO), has jumped by 3.00% year to date as of 05/16/2018. The shares currently trade at $113.07 and have been able to report a change of -2.52% over the past one week.
The stock of ConocoPhillips and Take-Two Interactive Software, Inc. were two of the most active stocks on Wednesday. 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. COP has an EBITDA margin of 19.65%, this implies that the underlying business of COP is more profitable. The ROI of COP is -2.60% while that of TTWO is 6.50%. These figures suggest that TTWO ventures generate a higher ROI than that of COP.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, COP’s free cash flow per share is a positive 1.58, while that of TTWO is positive 5.14.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 COP is 1.90 and that of TTWO is 1.20. This implies that it is easier for COP to cover its immediate obligations over the next 12 months than TTWO. The debt ratio of COP is 0.56 compared to 0.01 for TTWO. COP can be able to settle its long-term debts and thus is a lower financial risk than TTWO.Valuation
COP currently trades at a forward P/E of 19.38, a P/B of 2.70, and a P/S of 2.68 while TTWO trades at a forward P/E of 23.14, a P/B of 9.18, and a P/S of 6.75. This means that looking at the earnings, book values and sales basis, COP 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 COP is currently at a -1.02% to its one-year price target of 70.57. Looking at its rival pricing, TTWO is at a -13.12% relative to its price target of 130.15.
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), COP is given a 2.20 while 1.90 placed for TTWO. This means that analysts are more bullish on the outlook for COP 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 COP is 2.79 while that of TTWO is just 1.16. This means that analysts are more bullish on the forecast for TTWO stock.
The stock of ConocoPhillips defeats that of Take-Two Interactive Software, Inc. when the two are compared, with COP taking 5 out of the total factors that were been considered. COP 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, COP is the cheaper one on an earnings, book value and sales basis. Finally, the sentiment signal for COP is better on when it is viewed on short interest.