The shares of Bed Bath & Beyond Inc. have decreased by more than -12.28% this year alone. The shares recently went down by -2.92% or -$0.58 and now trades at $19.29. The shares of Carrizo Oil & Gas, Inc. (NASDAQ:CRZO), has jumped by 29.84% year to date as of 07/16/2018. The shares currently trade at $27.63 and have been able to report a change of -7.41% over the past one week.
The stock of Bed Bath & Beyond Inc. and Carrizo Oil & Gas, Inc. were two of the most active stocks on Monday. 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. BBBY has an EBITDA margin of 8.2%, this implies that the underlying business of CRZO is more profitable. The ROI of BBBY is 11.40% while that of CRZO is 11.50%. These figures suggest that CRZO ventures generate a higher ROI than that of BBBY.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, BBBY’s free cash flow per share is a positive 1.04, while that of CRZO is negative -0.01.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 BBBY is 1.90 and that of CRZO is 0.30. This implies that it is easier for BBBY to cover its immediate obligations over the next 12 months than CRZO. The debt ratio of BBBY is 0.51 compared to 3.69 for CRZO. CRZO can be able to settle its long-term debts and thus is a lower financial risk than BBBY.Valuation
BBBY currently trades at a forward P/E of 9.71, a P/B of 0.90, and a P/S of 0.22 while CRZO trades at a forward P/E of 6.39, a P/B of 5.76, and a P/S of 2.81. This means that looking at the earnings, book values and sales basis, BBBY 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 BBBY is currently at a 7.53% to its one-year price target of 17.94. Looking at its rival pricing, CRZO is at a -11.87% relative to its price target of 31.35.
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), BBBY is given a 3.50 while 2.00 placed for CRZO. This means that analysts are more bullish on the outlook for BBBY 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 BBBY is 5.95 while that of CRZO is just 3.85. This means that analysts are more bullish on the forecast for CRZO stock.
The stock of Bed Bath & Beyond Inc. defeats that of Carrizo Oil & Gas, Inc. when the two are compared, with BBBY taking 7 out of the total factors that were been considered. BBBY 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, BBBY is the cheaper one on an earnings, book value and sales basis. Finally, the sentiment signal for BBBY is better on when it is viewed on short interest.