The shares of Gannett Co., Inc. have decreased by more than -9.49% this year alone. The shares recently went down by -0.57% or -$0.06 and now trades at $10.49. The shares of Whirlpool Corporation (NYSE:WHR), has slumped by -12.48% year to date as of 06/06/2018. The shares currently trade at $147.60 and have been able to report a change of -1.10% over the past one week.
The stock of Gannett Co., Inc. and Whirlpool Corporation 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. GCI has an EBITDA margin of 8.08%, this implies that the underlying business of GCI is more profitable. The ROI of GCI is 5.60% while that of WHR is 10.70%. These figures suggest that WHR ventures generate a higher ROI than that of GCI.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, GCI’s free cash flow per share is a positive 1.08, while that of WHR is negative -3.96.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 GCI is 1.20 and that of WHR is 0.90. This implies that it is easier for GCI to cover its immediate obligations over the next 12 months than WHR. The debt ratio of GCI is 0.30 compared to 1.37 for WHR. WHR can be able to settle its long-term debts and thus is a lower financial risk than GCI.Valuation
GCI currently trades at a forward P/E of 10.28, a P/B of 1.16, and a P/S of 0.38 while WHR trades at a forward P/E of 8.42, a P/B of 2.45, and a P/S of 0.49. This means that looking at the earnings, book values and sales basis, GCI 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 GCI is currently at a -10.72% to its one-year price target of 11.75. Looking at its rival pricing, WHR is at a -21.2% relative to its price target of 187.30.
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), GCI is given a 2.70 while 2.70 placed for WHR. This means that analysts are equally bullish on their outlook for the two stocks 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 GCI is 11.03 while that of WHR is just 2.30. This means that analysts are more bullish on the forecast for WHR stock.
The stock of Whirlpool Corporation defeats that of Gannett Co., Inc. when the two are compared, with WHR taking 5 out of the total factors that were been considered. WHR 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, WHR is the cheaper one on an earnings, book value and sales basis. Finally, the sentiment signal for WHR is better on when it is viewed on short interest.