Earnings

A Comparison of Top Movers: The Goldman Sachs Group, Inc. (GS), Synthetic Biologics, Inc. (SYN)

The shares of The Goldman Sachs Group, Inc. have decreased by more than -8.24% this year alone. The shares recently went down by -1.10% or -$2.59 and now trades at $233.78. The shares of Synthetic Biologics, Inc. (NYSE:SYN), has slumped by -76.50% year to date as of 08/09/2018. The shares currently trade at $0.12 and have been able to report a change of -7.94% over the past one week.

The stock of The Goldman Sachs Group, Inc. and Synthetic Biologics, Inc. were two of the most active stocks on Thursday. 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. GS has an EBITDA margin of 75.26%, this implies that the underlying business of GS is more profitable. These figures suggest that GS ventures generate a higher ROI than that of SYN.

Valuation

GS currently trades at a forward P/E of 9.21, a P/B of 1.20, and a P/S of 1.83 while SYN trades at This means that looking at the earnings, book values and sales basis, GS 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 GS is currently at a -15.37% to its one-year price target of 276.23. Looking at its rival pricing, SYN is at a -96% relative to its price target of 3.00.

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), GS is given a 2.30 while 2.00 placed for SYN. This means that analysts are more bullish on the outlook for GS 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 GS is 1.41 while that of SYN is just 5.09. This means that analysts are more bullish on the forecast for GS stock.




Conclusion

The stock of The Goldman Sachs Group, Inc. defeats that of Synthetic Biologics, Inc. when the two are compared, with GS taking 6 out of the total factors that were been considered. GS 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, GS is the cheaper one on an earnings, book value and sales basis. Finally, the sentiment signal for GS is better on when it is viewed on short interest.

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