Precision Drilling Corporation (NYSE:PDS) shares are up more than 19.54% this year and recently increased 4.94% or $0.17 to settle at $3.61. OncoSec Medical Incorporated (NASDAQ:ONCS), on the other hand, is down -8.31% year to date as of 09/11/2018. It currently trades at $1.49 and has returned -5.10% during the past week.
Precision Drilling Corporation (NYSE:PDS) and OncoSec Medical Incorporated (NASDAQ:ONCS) are the two most active stocks in the Oil & Gas Equipment & Services 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.Cash Flow
The amount of free cash flow available to investors is ultimately what determines the value of a stock. PDS’s free cash flow (“FCF”) per share for the trailing twelve months was +0.32. Comparatively, ONCS’s free cash flow per share was -0.11.Liquidity and Financial Risk
Balance sheet risk is one of the biggest factors to consider before investing. PDS has a current ratio of 1.80 compared to 10.10 for ONCS. This means that ONCS can more easily cover its most immediate liabilities over the next twelve months. PDS’s debt-to-equity ratio is 0.98 versus a D/E of 0.00 for ONCS. PDS is therefore the more solvent of the two companies, and has lower financial risk.Valuation
PDS trades at a forward P/E of 75.21, a P/B of 0.79, and a P/S of 1.00, compared to a P/B of 2.33, for ONCS. PDS 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
A cheap stock is not necessarily a value stock. Most of the time, a stock is cheap for good reason. A stock only has value if the current price is substantially below the price at which it should trade in the future. PDS is currently priced at a -18.69% to its one-year price target of 4.44. Comparatively, ONCS is -68.09% relative to its price target of 4.67. This suggests that ONCS 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. PDS has a beta of 1.91 and ONCS’s beta is 2.99. PDS’s shares are therefore the less volatile of the two stocks.Insider Activity and Investor Sentiment
Short interest is another tool that analysts use to gauge investor sentiment. It represents the percentage of a stock’s tradable shares that are being shorted. PDS has a short ratio of 4.45 compared to a short interest of 10.06 for ONCS. This implies that the market is currently less bearish on the outlook for PDS.Summary
Precision Drilling Corporation (NYSE:PDS) beats OncoSec Medical Incorporated (NASDAQ:ONCS) on a total of 6 of the 13 factors compared between the two stocks. PDS generates a higher return on investment and has higher cash flow per share. Finally, PDS has better sentiment signals based on short interest.