Overstock.com, Inc. (NASDAQ:OSTK) shares are down more than -58.06% this year and recently increased 3.28% or $0.85 to settle at $26.80. Histogenics Corporation (NASDAQ:HSGX), on the other hand, is down -67.78% year to date as of 09/11/2018. It currently trades at $0.66 and has returned -76.16% during the past week.
Overstock.com, Inc. (NASDAQ:OSTK) and Histogenics Corporation (NASDAQ:HSGX) are the two most active stocks in the Catalog & Mail Order Houses 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
One of the key things investors look for in a company is the ability to grow earnings at a high compound rate over time. Analysts expect OSTK to grow earnings at a 5.00% annual rate over the next 5 years.Cash Flow
Earnings don’t always accurately reflect the amount of cash that a company brings in. OSTK’s free cash flow (“FCF”) per share for the trailing twelve months was -2.39. Comparatively, HSGX’s free cash flow per share was -0.23.Liquidity and Financial Risk
Liquidity and leverage ratios measure a company’s ability to meet short-term obligations and longer-term debts. OSTK has a current ratio of 0.90 compared to 0.80 for HSGX. This means that OSTK can more easily cover its most immediate liabilities over the next twelve months.Valuation
OSTK trades at a P/B of 6.43, and a P/S of 0.42, compared to for HSGX. 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
A cheap stock isn’t a good investment if the stock is priced accurately. To get a sense of “value” we must compare the current price to some measure of intrinsic value such as a price target. OSTK is currently priced at a -76.07% to its one-year price target of 112.00. Comparatively, HSGX is -84.65% relative to its price target of 4.30. This suggests that HSGX is the better investment over the next year.
Risk and Volatility
Beta is a metric that investors frequently use to analyze a stock’s systematic risk. A beta above 1 implies above average market volatility. Conversely, a stock with a beta below 1 is seen as less risky than the overall market. OSTK has a beta of 1.43 and HSGX’s beta is 2.01. OSTK’s shares are therefore the less volatile of the two stocks.Insider Activity and Investor Sentiment
The analysis of insider buying and selling trends can be extended to the aggregate level. Short interest, which represents the percentage of a stock’s tradable shares currently being shorted, captures what the market as a whole feels about a stock. OSTK has a short ratio of 4.79 compared to a short interest of 1.83 for HSGX. This implies that the market is currently less bearish on the outlook for HSGX.Summary
Histogenics Corporation (NASDAQ:HSGX) beats Overstock.com, Inc. (NASDAQ:OSTK) on a total of 7 of the 13 factors compared between the two stocks. HSGX is growing fastly, has higher cash flow per share and has lower financial risk. In terms of valuation, HSGX is the cheaper of the two stocks on book value and sales basis, HSGX is more undervalued relative to its price target. Finally, HSGX has better sentiment signals based on short interest.