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Choosing Between Hot Stocks: HTG Molecular Diagnostics, Inc. (HTGM), Finjan Holdings, Inc. (FNJN)

The shares of HTG Molecular Diagnostics, Inc. have increased by more than 152.71% this year alone. The shares recently went up by 14.51% or $0.65 and now trades at $5.13. The shares of Finjan Holdings, Inc. (NASDAQ:FNJN), has jumped by 27.31% year to date as of 02/14/2018. The shares currently trade at $2.75 and have been able to report a change of 51.10% over the past one week.

The stock of HTG Molecular Diagnostics, Inc. and Finjan Holdings, 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. These figures suggest that FNJN ventures generate a higher ROI than that of HTGM.



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, HTGM’s free cash flow per share is a negative -0.2, while that of FNJN is also a negative -0.03.

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 HTGM is 1.00 and that of FNJN is 5.30. This implies that it is easier for HTGM to cover its immediate obligations over the next 12 months than FNJN.

Valuation

HTGM currently trades at a P/S of 8.45 while FNJN trades at a forward P/E of 6.11, a P/B of 4.91, and a P/S of 2.14. This means that looking at the earnings, book values and sales basis, FNJN 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 HTGM is currently at a -6.73% to its one-year price target of 5.50. Looking at its rival pricing, FNJN is at a -45% relative to its price target of 5.00. This figure implies that over the next one year, FNJN 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), HTGM is given a 1.50 while 2.00 placed for FNJN. This means that analysts are more bullish on the outlook for FNJN 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 HTGM is 1.33 while that of FNJN is just 0.45. This means that analysts are more bullish on the forecast for FNJN stock.

Conclusion

The stock of HTG Molecular Diagnostics, Inc. defeats that of Finjan Holdings, Inc. when the two are compared, with HTGM taking 3 out of the total factors that were been considered. HTGM 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, HTGM is the cheaper one on an earnings, book value and sales basis. Finally, the sentiment signal for HTGM is better on when it is viewed on short interest.

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