The shares of Hi-Crush Partners LP have increased by more than 14.95% this year alone. The shares recently went down by -1.99% or -$0.25 and now trades at $12.30. The shares of Penn National Gaming, Inc. (NASDAQ:PENN), has jumped by 1.56% year to date as of 06/13/2018. The shares currently trade at $31.82 and have been able to report a change of -5.89% over the past one week.
The stock of Hi-Crush Partners LP and Penn National Gaming, 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. HCLP has an EBITDA margin of 20.96%, this implies that the underlying business of PENN is more profitable. The ROI of HCLP is 9.40% while that of PENN is 25.00%. These figures suggest that PENN ventures generate a higher ROI than that of HCLP.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, HCLP’s free cash flow per share is a positive 0.01, while that of PENN is positive 1.69.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 HCLP is 1.90 and that of PENN is 0.70. This implies that it is easier for HCLP to cover its immediate obligations over the next 12 months than PENN.Valuation
HCLP currently trades at a forward P/E of 4.74, a P/B of 1.35, and a P/S of 1.52 while PENN trades at a forward P/E of 16.74, and a P/S of 0.95. This means that looking at the earnings, book values and sales basis, HCLP 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 HCLP is currently at a -27.69% to its one-year price target of 17.01. Looking at its rival pricing, PENN is at a -12.22% relative to its price target of 36.25.
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), HCLP is given a 1.90 while 2.10 placed for PENN. This means that analysts are more bullish on the outlook for PENN 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 HCLP is 3.88 while that of PENN is just 5.80. This means that analysts are more bullish on the forecast for HCLP stock.
The stock of Hi-Crush Partners LP defeats that of Penn National Gaming, Inc. when the two are compared, with HCLP taking 6 out of the total factors that were been considered. HCLP 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, HCLP is the cheaper one on an earnings, book value and sales basis. Finally, the sentiment signal for HCLP is better on when it is viewed on short interest.