Global

Which is more compelling pick right now? – Harmony Gold Mining Company Limited (HMY), Retractable Technologies, Inc. (RVP)

The shares of Harmony Gold Mining Company Limited have increased by more than 11.23% this year alone. The shares recently went up by 11.83% or $0.22 and now trades at $2.08. The shares of Retractable Technologies, Inc. (NYSE:RVP), has jumped by 32.59% year to date as of 02/14/2018. The shares currently trade at $0.90 and have been able to report a change of 16.47% over the past one week.

The stock of Harmony Gold Mining Company Limited and Retractable Technologies, 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. The ROI of HMY is 1.00% while that of RVP is -11.20%. These figures suggest that HMY ventures generate a higher ROI than that of RVP.



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, HMY’s free cash flow per share is a positive 37.74.

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 HMY is 1.30 and that of RVP is 3.20. This implies that it is easier for HMY to cover its immediate obligations over the next 12 months than RVP. The debt ratio of HMY is 0.07 compared to 0.13 for RVP. RVP can be able to settle its long-term debts and thus is a lower financial risk than HMY.

Valuation

HMY currently trades at a forward P/E of 5.33, a P/B of 0.38, and a P/S of 0.58 while RVP trades at a P/B of 1.05, and a P/S of 0.94. This means that looking at the earnings, book values and sales basis, HMY 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 HMY is currently at a 6.12% to its one-year price target of 1.96. This figure implies that over the next one year, RVP 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), HMY is given a 3.30 .

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 HMY is 1.70 while that of RVP is just 0.45. This means that analysts are more bullish on the forecast for RVP stock.

Conclusion

The stock of Retractable Technologies, Inc. defeats that of Harmony Gold Mining Company Limited when the two are compared, with RVP taking 4 out of the total factors that were been considered. RVP 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, RVP is the cheaper one on an earnings, book value and sales basis. Finally, the sentiment signal for RVP is better on when it is viewed on short interest.

Previous ArticleNext Article

Related Post

Taking Tally Of Inovio Pharmaceuticals, Inc. (INO)... The shares of Inovio Pharmaceuticals, Inc. have increased by more than 23.24% this year alone. The shares recently went down by -10.54% or -$0.6 and n...
Is Fitbit, Inc. (FIT) Investing Its Way Into A Mud... Fitbit, Inc. (NYSE:FIT) gained 0.66% in Tuesday’s session, going up from its prior closing price of $6.10 to $6.14, and has now recorded rally in 4 co...
Which is more compelling pick right now? – E... The shares of Euronet Worldwide, Inc. have decreased by more than -14.25% this year alone. The shares recently went down by -5.06% or -$3.85 and now t...
Are These Stocks A Sure Bet? – Banco Bradesc... The shares of Banco Bradesco S.A. have increased by more than 34.22% this year alone. The shares recently went up by 0.67% or $0.07 and now trades at ...
PACCAR Inc (PCAR) Technical Analysis 16/10/2017 PACCAR Inc (NASDAQ:PCAR) fell by -0.33% in Friday’s trading session from $72.93 to $72.69 The stock price went upward in 7 of the last 10 days and has...