The shares of Penn National Gaming, Inc. have increased by more than 13.15% this year alone. The shares recently went up by 3.32% or $1.14 and now trades at $35.45. The shares of Oil States International, Inc. (NYSE:OIS), has jumped by 34.28% year to date as of 05/17/2018. The shares currently trade at $38.00 and have been able to report a change of 4.68% over the past one week.
The stock of Penn National Gaming, Inc. and Oil States International, Inc. were two of the most active stocks on Thuday. 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. PENN has an EBITDA margin of 23.85%, this implies that the underlying business of PENN is more profitable. The ROI of PENN is 25.00% while that of OIS is -2.30%. These figures suggest that PENN ventures generate a higher ROI than that of OIS.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, PENN’s free cash flow per share is a positive 1.69.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 PENN is 0.70 and that of OIS is 4.20. This implies that it is easier for PENN to cover its immediate obligations over the next 12 months than OIS.Valuation
PENN currently trades at a forward P/E of 18.65, and a P/S of 1.00 while OIS trades at a forward P/E of 41.71, a P/B of 1.51, and a P/S of 2.96. This means that looking at the earnings, book values and sales basis, PENN 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 PENN is currently at a 0.57% to its one-year price target of 35.25. Looking at its rival pricing, OIS is at a 30.76% relative to its price target of 29.06.
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), PENN is given a 2.10 while 2.60 placed for OIS. This means that analysts are more bullish on the outlook for OIS 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 PENN is 4.90 while that of OIS is just 4.94. This means that analysts are more bullish on the forecast for PENN stock.
The stock of Oil States International, Inc. defeats that of Penn National Gaming, Inc. when the two are compared, with OIS taking 1 out of the total factors that were been considered. OIS 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, OIS is the cheaper one on an earnings, book value and sales basis. Finally, the sentiment signal for OIS is better on when it is viewed on short interest.