The shares of CenturyLink, Inc. have decreased by more than -37.76% this year alone. The shares recently trades at $14.80. The shares of Helios and Matheson Analytics Inc. (NASDAQ:HMNY), has jumped by 312.12% year to date as of 11/20/2017. The shares currently trade at $13.60 and have been able to report a change of 10.30% over the past one week.
The stock of CenturyLink, Inc. and Helios and Matheson Analytics Inc. were two of the most active stocks on Monday. 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. CTL has an EBITDA margin of 39.56%, this implies that the underlying business of CTL is more profitable. The ROI of CTL is 5.90% while that of HMNY is -17.50%. These figures suggest that CTL ventures generate a higher ROI than that of HMNY.
The value of a stock is ultimately determined by the amount of cash flow that the investors have available. Over the last 12 months, CTL’s free cash flow per share is a negative -0.98, while that of HMNY is also a negative -0.06.
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 CTL is 0.80 and that of HMNY is 0.20. This implies that it is easier for CTL to cover its immediate obligations over the next 12 months than HMNY.
CTL currently trades at a forward P/E of 13.16, a P/B of 0.62, and a P/S of 0.95 while HMNY trades at a forward P/S of 26.90 . This means that looking at the earnings, book values and sales basis, CTL 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 CTL is currently at a -27.91% to its one-year price target of 20.53. Looking at its rival pricing, HMNY is at a -45.6% relative to its price target of 25.00. This figure implies that over the next one year, HMNY is a better investment.
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), CTL is given a 2.70 while 2.00 placed for HMNY. This means that analysts are more bullish on the outlook for CTL 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 CTL is 10.58 while that of HMNY is just 0.32. This means that analysts are more bullish on the forecast for HMNY stock.
The stock of CenturyLink, Inc. defeats that of Helios and Matheson Analytics Inc. when the two are compared, with CTL taking 5 out of the total factors that were been considered. CTL 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, CTL is the cheaper one on an earnings, book value and sales basis. Finally, the sentiment signal for CTL is better on when it is viewed on short interest.