NII Holdings, Inc. (NASDAQ:NIHD) shares are up more than 1087.84% this year and recently decreased -4.55% or -$0.24 to settle at $5.04. Westwater Resources, Inc. (NASDAQ:WWR), on the other hand, is down -80.84% year to date as of 09/11/2018. It currently trades at $0.20 and has returned 2.50% during the past week.
NII Holdings, Inc. (NASDAQ:NIHD) and Westwater Resources, Inc. (NASDAQ:WWR) are the two most active stocks in the Wireless Communications industry based on today’s trading volumes. The market is clearly enthusiastic about both these stocks, but which is the better investment? To answer this, we will compare the two companies based on the strength of their growth, profitability, risk, returns, valuation, analyst recommendations, and insider trends.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. Comparatively, WWR is expected to grow at a 20.00% annual rate. All else equal, WWR’s higher growth rate would imply a greater potential for capital appreciation.Cash Flow
The value of a stock is simply the present value of its future free cash flows. NIHD’s free cash flow (“FCF”) per share for the trailing twelve months was -0.55. Comparatively, WWR’s free cash flow per share was -.Liquidity and Financial Risk
Liquidity and leverage ratios are important because they reveal the financial health of a company. NIHD has a current ratio of 1.40 compared to 1.70 for WWR. This means that WWR can more easily cover its most immediate liabilities over the next twelve months.Valuation
NIHD trades at a P/S of 0.70, compared to a P/B of 0.29, for WWR. NIHD 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
Just because a stock is cheaper doesn’t mean there’s more value to be had. In order to assess value we need to compare the current price to where it’s likely to trade in the future. NIHD is currently priced at a 303.2% to its one-year price target of 1.25. Comparatively, WWR is -93.33% relative to its price target of 3.00. This suggests that WWR is the better investment over the next year.
Insider Activity and Investor Sentiment
Analysts often look at short interest, or the percentage of a company’s float currently being shorted by investors, to aid in their outlook for a particular stock. NIHD has a short ratio of 4.17 compared to a short interest of 4.49 for WWR. This implies that the market is currently less bearish on the outlook for NIHD.Summary
Westwater Resources, Inc. (NASDAQ:WWR) beats NII Holdings, Inc. (NASDAQ:NIHD) on a total of 8 of the 13 factors compared between the two stocks. WWR , generates a higher return on investment, has higher cash flow per share, higher liquidity and has lower financial risk. WWR is more undervalued relative to its price target. Finally, GLUU has better sentiment signals based on short interest.