The shares of Contango Oil & Gas Company have decreased by more than -66.92% this year alone. The shares recently went up by 18.39% or $0.48 and now trades at $3.09. The shares of National Beverage Corp. (NASDAQ:FIZZ), has jumped by 100.55% year to date as of 12/08/2017. The shares currently trade at $100.84 and have been able to report a change of -5.51% over the past one week.
The stock of Contango Oil & Gas Company and National Beverage Corp. were two of the most active stocks on Friday. 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. MCF has an EBITDA margin of 26.57%, this implies that the underlying business of MCF is more profitable. The ROI of MCF is -18.50% while that of FIZZ is 42.80%. These figures suggest that FIZZ ventures generate a higher ROI than that of MCF.
The value of a stock is ultimately determined by the amount of cash flow that the investors have available. Over the last 12 months, MCF’s free cash flow per share is a negative -0.01, while that of FIZZ is also a negative -0.01.
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 MCF is 0.30 and that of FIZZ is 1.80. This implies that it is easier for MCF to cover its immediate obligations over the next 12 months than FIZZ. The debt ratio of MCF is 0.35 compared to 0.00 for FIZZ. MCF can be able to settle its long-term debts and thus is a lower financial risk than FIZZ.
MCF currently trades at a P/B of 0.33, and a P/S of 0.96 while FIZZ trades at a forward P/E of 29.49, a P/B of 21.50, and a P/S of 5.22. This means that looking at the earnings, book values and sales basis, MCF 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 MCF is currently at a -50.24% to its one-year price target of 6.21. Looking at its rival pricing, FIZZ is at a 9.61% relative to its price target of 92.00. This figure implies that over the next one year, FIZZ 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), MCF is given a 2.30 while 3.30 placed for FIZZ. This means that analysts are more bullish on the outlook for FIZZ 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 MCF is 0.53 while that of FIZZ is just 7.92. This means that analysts are more bullish on the forecast for MCF stock.
The stock of National Beverage Corp. defeats that of Contango Oil & Gas Company when the two are compared, with FIZZ taking 5 out of the total factors that were been considered. FIZZ 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, FIZZ is the cheaper one on an earnings, book value and sales basis. Finally, the sentiment signal for FIZZ is better on when it is viewed on short interest.