The shares of Crown Holdings, Inc. have decreased by more than -20.53% this year alone. The shares recently went down by -0.33% or -$0.15 and now trades at $44.70. The shares of Viking Therapeutics, Inc. (NASDAQ:VKTX), has jumped by 143.60% year to date as of 08/09/2018. The shares currently trade at $9.89 and have been able to report a change of -7.48% over the past one week.
The stock of Crown Holdings, Inc. and Viking Therapeutics, 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.Next 5Y EPS Growth: 15.06% versus 40.00%
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 CCK will grow it’s earning at a 15.06% annual rate in the next 5 years. This is in contrast to VKTX which will have a positive growth at a 40.00% annual rate. This means that the higher growth rate of VKTX 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. CCK has an EBITDA margin of 13.02%, this implies that the underlying business of CCK is more profitable. These figures suggest that CCK ventures generate a higher ROI than that of VKTX.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 CCK is 1.20 and that of VKTX is 12.40. This implies that it is easier for CCK to cover its immediate obligations over the next 12 months than VKTX. The debt ratio of CCK is 11.93 compared to 0.05 for VKTX. CCK can be able to settle its long-term debts and thus is a lower financial risk than VKTX.Valuation
CCK currently trades at a forward P/E of 7.66, a P/B of 7.61, and a P/S of 0.60 while VKTX trades at a P/B of 6.18, This means that looking at the earnings, book values and sales basis, CCK 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 CCK is currently at a -22.7% to its one-year price target of 57.83. Looking at its rival pricing, VKTX is at a -30.98% relative to its price target of 14.33.
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), CCK is given a 2.40 while 1.90 placed for VKTX. This means that analysts are more bullish on the outlook for CCK 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 CCK is 4.64 while that of VKTX is just 2.86. This means that analysts are more bullish on the forecast for VKTX stock.
The stock of Crown Holdings, Inc. defeats that of Viking Therapeutics, Inc. when the two are compared, with CCK taking 4 out of the total factors that were been considered. CCK 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, CCK is the cheaper one on an earnings, book value and sales basis. Finally, the sentiment signal for CCK is better on when it is viewed on short interest.