The shares of Heartland Express, Inc. have decreased by more than -12.21% this year alone. The shares recently went down by -4.03% or -$0.86 and now trades at $20.49. The shares of Adamis Pharmaceuticals Corporation (NASDAQ:ADMP), has slumped by -21.59% year to date as of 02/14/2018. The shares currently trade at $3.45 and have been able to report a change of -1.43% over the past one week.
The stock of Heartland Express, Inc. and Adamis Pharmaceuticals Corporation 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. HTLD has an EBITDA margin of 32.44%, this implies that the underlying business of HTLD is more profitable. The ROI of HTLD is 11.10% while that of ADMP is -63.10%. These figures suggest that HTLD ventures generate a higher ROI than that of ADMP.
The value of a stock is ultimately determined by the amount of cash flow that the investors have available. Over the last 12 months, HTLD’s free cash flow per share is a positive -0, while that of ADMP is 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 HTLD is 1.90 and that of ADMP is 3.90. This implies that it is easier for HTLD to cover its immediate obligations over the next 12 months than ADMP. The debt ratio of HTLD is 0.00 compared to 0.11 for ADMP. ADMP can be able to settle its long-term debts and thus is a lower financial risk than HTLD.
HTLD currently trades at a forward P/E of 25.71, a P/B of 3.18, and a P/S of 2.95 while ADMP trades at a P/B of 2.36, and a P/S of 9.45. This means that looking at the earnings, book values and sales basis, HTLD 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 HTLD is currently at a -2.43% to its one-year price target of 21.00. Looking at its rival pricing, ADMP is at a -66.08% relative to its price target of 10.17. This figure implies that over the next one year, ADMP 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), HTLD is given a 3.60 while 2.00 placed for ADMP. This means that analysts are more bullish on the outlook for HTLD 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 HTLD is 14.50 while that of ADMP is just 4.24. This means that analysts are more bullish on the forecast for ADMP stock.
The stock of Heartland Express, Inc. defeats that of Adamis Pharmaceuticals Corporation when the two are compared, with HTLD taking 6 out of the total factors that were been considered. HTLD 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, HTLD is the cheaper one on an earnings, book value and sales basis. Finally, the sentiment signal for HTLD is better on when it is viewed on short interest.