BioPharmX Corporation (NYSE:BPMX) shares are up more than 163.16% this year and recently decreased -2.36% or -$0.01 to settle at $0.29. Akers Biosciences, Inc. (NASDAQ:AKER), on the other hand, is up 407.46% year to date as of 03/15/2018. It currently trades at $0.68 and has returned 17.24% during the past week.
BioPharmX Corporation (NYSE:BPMX) and Akers Biosciences, Inc. (NASDAQ:AKER) are the two most active stocks in the market based on today’s trading volumes. Investor interest in the two stocks is clearly very high, but which is the better investment? To answer this question, we will compare the two companies across growth, profitability, risk, and valuation metrics, and also examine their analyst ratings and insider activity trends.
The value of a stock is simply the present value of its future free cash flows. BPMX’s free cash flow (“FCF”) per share for the trailing twelve months was -0.04. Comparatively, AKER’s free cash flow per share was -0.12. On a percent-of-sales basis, BPMX’s free cash flow was -5.13% while AKER converted -0.1% of its revenues into cash flow. This means that, for a given level of sales, AKER is able to generate more free cash flow for investors.
Liquidity and Financial Risk
Liquidity and leverage ratios provide insight into the financial health of a company, and allow investors to determine the likelihood that the company will be able to continue operating as a going concern. BPMX has a current ratio of 0.60 compared to 2.50 for AKER. This means that AKER can more easily cover its most immediate liabilities over the next twelve months.
BPMX trades at a P/S of 493.34, compared to a forward P/E of 4.86, a P/B of 1.55, and a P/S of 13.78 for AKER. Given that earnings are what matter most to investors, analysts tend to place a greater weight on the P/E.
Analyst Price Targets and Opinions
A cheap stock isn’t a good investment if the stock is priced accurately. To get a sense of “value” we must compare the current price to some measure of intrinsic value such as a price target. BPMX is currently priced at a -72.38% to its one-year price target of 1.05. Comparatively, AKER is -83% relative to its price target of 4.00. This suggests that AKER is the better investment over the next year.
The average investment recommendation on a scale of 1 to 5 (1 being a strong buy, 3 a hold, and 5 a sell) is 2.00 for BPMX and 2.00 for AKER, which implies that analysts are equally bullish on their outlook for the two stocks.
Risk and Volatility
Beta is an important measure that gives investors a sense of the market risk associated with a particular stock. A beta above 1 signals above average market risk, while a beta below 1 implies below average volatility. BPMX has a beta of -0.70 and AKER’s beta is -0.96. AKER’s shares are therefore the less volatile of the two stocks.
Insider Activity and Investor Sentiment
Short interest is another tool that analysts use to gauge investor sentiment. It represents the percentage of a stock’s tradable shares that are being shorted. BPMX has a short ratio of 0.75 compared to a short interest of 0.57 for AKER. This implies that the market is currently less bearish on the outlook for AKER.
Akers Biosciences, Inc. (NASDAQ:AKER) beats BioPharmX Corporation (NYSE:BPMX) on a total of 7 of the 14 factors compared between the two stocks. AKER generates a higher return on investment, higher liquidity and has lower financial risk. AKER is more undervalued relative to its price target. Finally, AKER has better sentiment signals based on short interest.