Earnings

A Comparison of Top Movers: Community Health Systems, Inc. (CYH), Vornado Realty Trust (VNO)

The shares of Community Health Systems, Inc. have increased by more than 2.58% this year alone. The shares recently went down by -1.80% or -$0.08 and now trades at $4.37. The shares of Vornado Realty Trust (NYSE:VNO), has slumped by -8.69% year to date as of 06/13/2018. The shares currently trade at $71.39 and have been able to report a change of -0.60% over the past one week.

The stock of Community Health Systems, Inc. and Vornado Realty Trust 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: 6.10% versus 17.33%

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 CYH will grow it’s earning at a 6.10% annual rate in the next 5 years. This is in contrast to VNO which will have a positive growth at a 17.33% annual rate. This means that the higher growth rate of VNO 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. The ROI of CYH is -10.90% while that of VNO is 4.40%. These figures suggest that VNO ventures generate a higher ROI than that of CYH.

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, CYH’s free cash flow per share is a negative -0.48, while that of VNO is positive 6.48.

Valuation

CYH currently trades at a P/S of 0.03 while VNO trades at a forward P/E of 50.31, a P/B of 3.91, and a P/S of 6.45. This means that looking at the earnings, book values and sales basis, CYH 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 CYH is currently at a -8.19% to its one-year price target of 4.76. Looking at its rival pricing, VNO is at a -8.57% relative to its price target of 78.08.




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), CYH is given a 3.40 while 2.20 placed for VNO. This means that analysts are more bullish on the outlook for CYH 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 CYH is 13.74 while that of VNO is just 3.81. This means that analysts are more bullish on the forecast for VNO stock.

Conclusion

The stock of Community Health Systems, Inc. defeats that of Vornado Realty Trust when the two are compared, with CYH taking 5 out of the total factors that were been considered. CYH 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, CYH is the cheaper one on an earnings, book value and sales basis. Finally, the sentiment signal for CYH is better on when it is viewed on short interest.

Previous ArticleNext Article

Related Post

Comparing QEP Resources, Inc. (QEP) and Williams P... QEP Resources, Inc. (NYSE:QEP) shares are down more than -48.61% this year and recently increased 1.72% or $0.16 to settle at $9.46. Williams Partners...
Taking a Look at the Operational Data for Nucor (N... Nucor Corporation (NYSE:NUE) is an interesting stock at present. Now trading with a market value of 18.50B, the company has a mix of catalysts and obs...
A Side-by-side Analysis of Hess Corporation (HES) ... Hess Corporation (NYSE:HES) shares are down more than -4.09% this year and recently increased 0.35% or $0.16 to settle at $45.53. The Goodyear Tire &a...
Should You Buy Catabasis Pharmaceuticals, Inc. (CA... Catabasis Pharmaceuticals, Inc. (NASDAQ:CATB) shares are down more than -31.02% this year and recently decreased -12.32% or -$0.35 to settle at $2.49....
Palo Alto Networks, Inc. (PANW) and Finisar Corpor... Palo Alto Networks, Inc. (NYSE:PANW) shares are up more than 8.24% this year and recently increased 1.06% or $1.64 to settle at $156.89. Finisar Corpo...