Earnings

Diana Shipping Inc. (DSX) is better stock pick than Commvault Systems, Inc. (CVLT)

The shares of Diana Shipping Inc. have decreased by more than -16.46% this year alone. The shares recently went down by -2.30% or -$0.08 and now trades at $3.40. The shares of Commvault Systems, Inc. (NASDAQ:CVLT), has jumped by 27.81% year to date as of 04/04/2018. The shares currently trade at $67.10 and have been able to report a change of 17.82% over the past one week.

The stock of Diana Shipping Inc. and Commvault Systems, Inc. were two of the most active stocks on Wedday. 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.

Next 5Y EPS Growth: 5.00% versus 22.00%

When a company is able to grow consistently in terms of earnings at a high compound rate have the highest likelihood of creating value for its shareholders over time. Analysts have predicted that DSX will grow it’s earning at a 5.00% annual rate in the next 5 years. This is in contrast to CVLT which will have a positive growth at a 22.00% annual rate. This means that the higher growth rate of CVLT implies a greater potential for capital appreciation over the years.

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 DSX is -39.50% while that of CVLT is 0.30%. These figures suggest that CVLT ventures generate a higher ROI than that of DSX.

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, DSX’s free cash flow per share is a positive 0.

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 DSX is 1.70 and that of CVLT is 2.00. This implies that it is easier for DSX to cover its immediate obligations over the next 12 months than CVLT. The debt ratio of DSX is 0.96 compared to 0.00 for CVLT. DSX can be able to settle its long-term debts and thus is a lower financial risk than CVLT.

Valuation

DSX currently trades at a forward P/E of 20.61, a P/B of 0.56, and a P/S of 2.09 while CVLT trades at a forward P/E of 43.43, a P/B of 7.67, and a P/S of 4.31. This means that looking at the earnings, book values and sales basis, DSX 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 DSX is currently at a -26.57% to its one-year price target of 4.63. Looking at its rival pricing, CVLT is at a 1.94% relative to its price target of 65.82.

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), DSX is given a 2.90 while 1.80 placed for CVLT. This means that analysts are more bullish on the outlook for DSX 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 DSX is 6.95 while that of CVLT is just 2.24. This means that analysts are more bullish on the forecast for CVLT stock.

Conclusion

The stock of Diana Shipping Inc. defeats that of Commvault Systems, Inc. when the two are compared, with DSX taking 4 out of the total factors that were been considered. DSX 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, DSX is the cheaper one on an earnings, book value and sales basis. Finally, the sentiment signal for DSX is better on when it is viewed on short interest.

Previous ArticleNext Article

Related Post

The New York Times Company (NYT) and Gannett Co., ... Gannett Co., Inc. (NYSE:GCI), on the other hand, is down -5.44% year to date as of 02/12/2018. It currently trades at $10.96 and has returned 3.59% du...
JPMorgan Chase & Co. (JPM) and SunTrust Banks... JPMorgan Chase & Co. (NYSE:JPM) shares are up more than 4.98% this year and recently decreased -0.36% or -$0.4 to settle at $112.27. SunTrust Bank...
Are These Stocks A Sure Bet? – Altaba Inc. (... The shares of Altaba Inc. have increased by more than 10.47% this year alone. The shares recently went up by 0.17% or $0.13 and now trades at $77.16. ...
Critical Comparison: Liberty Broadband Corporation... Liberty Broadband Corporation (NASDAQ:LBRDK) shares are up more than 14.84% this year and recently increased 1.82% or $1.52 to settle at $85.06. Sincl...
Bed Bath & Beyond Inc. (BBBY) vs. RH (RH): Wh... Bed Bath & Beyond Inc. (NASDAQ:BBBY) shares are down more than -52.61% this year and recently decreased -3.60% or -$0.72 to settle at $19.26. RH (...