The shares of Edgewell Personal Care Company have decreased by more than -8.27% this year alone. The shares recently went up by 8.61% or $4.32 and now trades at $54.48. The shares of Endeavour Silver Corp. (NYSE:EXK), has jumped by 0.42% year to date as of 02/14/2018. The shares currently trade at $2.40 and have been able to report a change of 9.59% over the past one week.
The stock of Edgewell Personal Care Company and Endeavour Silver Corp. 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. EPC has an EBITDA margin of 18.09%, this implies that the underlying business of EPC is more profitable. The ROI of EPC is 0.20% while that of EXK is 7.30%. These figures suggest that EXK ventures generate a higher ROI than that of EPC.
The value of a stock is ultimately determined by the amount of cash flow that the investors have available. Over the last 12 months, EPC’s free cash flow per share is a negative -1.39.
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 EPC is 2.70 and that of EXK is 3.90. This implies that it is easier for EPC to cover its immediate obligations over the next 12 months than EXK. The debt ratio of EPC is 1.03 compared to 0.01 for EXK. EPC can be able to settle its long-term debts and thus is a lower financial risk than EXK.
EPC currently trades at a forward P/E of 13.36, a P/B of 1.82, and a P/S of 1.30 while EXK trades at a forward P/E of 12.44, a P/B of 2.14, and a P/S of 2.27. This means that looking at the earnings, book values and sales basis, EPC 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 EPC is currently at a -14.57% to its one-year price target of 63.77. Looking at its rival pricing, EXK is at a -47.02% relative to its price target of 4.53. This figure implies that over the next one year, EXK 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), EPC is given a 2.80 while 2.40 placed for EXK. This means that analysts are more bullish on the outlook for EPC 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 EPC is 9.07 while that of EXK is just 4.82. This means that analysts are more bullish on the forecast for EXK stock.
The stock of Edgewell Personal Care Company defeats that of Endeavour Silver Corp. when the two are compared, with EPC taking 4 out of the total factors that were been considered. EPC 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, EPC is the cheaper one on an earnings, book value and sales basis. Finally, the sentiment signal for EPC is better on when it is viewed on short interest.