Earnings

A Comparison of Top Movers: Cinemark Holdings, Inc. (CNK), Anthem, Inc. (ANTM)

The shares of Cinemark Holdings, Inc. have decreased by more than -1.81% this year alone. The shares of Anthem, Inc. (NYSE:ANTM), has jumped by 1.27% year to date as of 06/06/2018. The shares currently trade at $227.86 and have been able to report a change of -1.61% over the past one week.

The stock of Cinemark Holdings, Inc. and Anthem, 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.

Next 5Y EPS Growth: 15.00% versus 15.36%

When a company is able to grow consistently in terms of earnings at a high compound rate have the highest likelihood of creating value for its shareholders over time. Analysts have predicted that CNK will grow it’s earning at a 15.00% annual rate in the next 5 years. This is in contrast to ANTM which will have a positive growth at a 15.36% annual rate. This means that the higher growth rate of ANTM implies a greater potential for capital appreciation over the years.

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. CNK has an EBITDA margin of 22.24%, this implies that the underlying business of CNK is more profitable. The ROI of CNK is 7.70% while that of ANTM is 7.50%. These figures suggest that CNK ventures generate a higher ROI than that of ANTM.

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, CNK’s free cash flow per share is a negative -1.13, while that of ANTM is positive 1.95.

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 debt ratio of CNK is 1.41 compared to 0.74 for ANTM. CNK can be able to settle its long-term debts and thus is a lower financial risk than ANTM.

Valuation

CNK currently trades at a forward P/E of 13.68, a P/B of 2.71, and a P/S of 1.33 while ANTM trades at a forward P/E of 13.48, a P/B of 2.16, and a P/S of 0.65. This means that looking at the earnings, book values and sales basis, ANTM 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 CNK is currently at a -20.95% to its one-year price target of 43.25. Looking at its rival pricing, ANTM is at a -19.88% relative to its price target of 284.39.

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), CNK is given a 2.20 while 1.90 placed for ANTM. This means that analysts are more bullish on the outlook for CNK 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 CNK is 10.62 while that of ANTM is just 2.53. This means that analysts are more bullish on the forecast for ANTM stock.

Conclusion

The stock of Cinemark Holdings, Inc. defeats that of Anthem, Inc. when the two are compared, with CNK taking 4 out of the total factors that were been considered. CNK 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, CNK is the cheaper one on an earnings, book value and sales basis. Finally, the sentiment signal for CNK is better on when it is viewed on short interest.

Previous ArticleNext Article

Related Post

MabVax Therapeutics Holdings, Inc. (MBVX) Forming ... MabVax Therapeutics Holdings, Inc. (NASDAQ:MBVX) is one of the more popular stocks investors are adding into their watchlist. Now trading with a marke...
Dissecting the Numbers for Opko Health, Inc. (OPK)... Opko Health, Inc. (NASDAQ:OPK) shares are down more than -10.20% this year and recently decreased -1.57% or -$0.07 to settle at $4.40. Clovis Oncology...
Did Lumber Liquidators Holdings, Inc. (LL) Trigger... Lumber Liquidators Holdings, Inc. (NYSE:LL) fell by -4.65% in Wednesday’s trading session from $38.92 to $37.11 The stock price went upward in 6 of th...
Which is more compelling pick right now? – P... The shares of PPL Corporation have decreased by more than -9.05% this year alone. The shares recently went up by 0.79% or $0.22 and now trades at $28....
Which Market Offer More Value? – Greenhill &... The shares of Greenhill & Co., Inc. have increased by more than 23.85% this year alone. The shares recently went up by 14.18% or $3 and now trade...