Finance

Choosing Between First Majestic Silver Corp. (AG) and Apricus Biosciences, Inc. (APRI)

First Majestic Silver Corp. (NYSE:AG) shares are down more than -21.66% this year and recently decreased -0.94% or -$0.05 to settle at $5.28. Apricus Biosciences, Inc. (NASDAQ:APRI), on the other hand, is down -82.07% year to date as of 09/11/2018. It currently trades at $0.33 and has returned 17.86% during the past week.

First Majestic Silver Corp. (NYSE:AG) and Apricus Biosciences, Inc. (NASDAQ:APRI) are the two most active stocks in the Silver industry based on today’s trading volumes. We will compare the two companies based on the strength of various metrics, including growth, profitability, risk, return, and valuation to determine if one is a better investment than the other.

Growth

Companies that can consistently grow earnings at a high compound rate usually have the greatest potential to create value for shareholders in the long-run. Analysts expect AG to grow earnings at a 46.80% annual rate over the next 5 years.

Cash Flow

The amount of free cash flow available to investors is ultimately what determines the value of a stock. AG’s free cash flow (“FCF”) per share for the trailing twelve months was -0.14. Comparatively, APRI’s free cash flow per share was -0.08.

Valuation

AG trades at a forward P/E of 75.43, a P/B of 1.37, and a P/S of 3.35, compared to a P/B of 1.43, for APRI. AG is the cheaper of the two stocks on book value basis but is expensive in terms of P/E and P/S ratio. Given that earnings are what matter most to investors, analysts tend to place a greater weight on the P/E.

Analyst Price Targets and Opinions

Investors often compare a stock’s current price to an analyst price target to get a sense of the potential upside within the next year. AG is currently priced at a -44.65% to its one-year price target of 9.54. Comparatively, APRI is -73.6% relative to its price target of 1.25. This suggests that APRI is the better investment over the next year.

Insider Activity and Investor Sentiment



Short interest, or the percentage of a stock’s tradable shares currently being shorted, is another metric investors use to get a pulse on sentiment. AG has a short ratio of 9.17 compared to a short interest of 1.42 for APRI. This implies that the market is currently less bearish on the outlook for APRI.

Summary

Apricus Biosciences, Inc. (NASDAQ:APRI) beats First Majestic Silver Corp. (NYSE:AG) on a total of 7 of the 13 factors compared between the two stocks. APRI is growing fastly, higher liquidity and has lower financial risk. In terms of valuation, APRI is the cheaper of the two stocks on an earnings and sales basis, APRI is more undervalued relative to its price target. Finally, APRI has better sentiment signals based on short interest.

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