SandRidge Energy, Inc. (NYSE:SD) shares are down more than -44.61% this year and recently decreased -18.39% or -$2.63 to settle at $11.67. Akers Biosciences, Inc. (NASDAQ:AKER), on the other hand, is up 88.81% year to date as of 09/11/2018. It currently trades at $0.25 and has returned -1.90% during the past week.
SandRidge Energy, Inc. (NYSE:SD) and Akers Biosciences, Inc. (NASDAQ:AKER) are the two most active stocks in the Oil & Gas Drilling & Exploration industry based on today’s trading volumes. To determine if one is a better investment than the other, we will compare the two companies’ growth, profitability, risk, return, and valuation characteristics, as well as their analyst ratings and sentiment signals.Growth
The ability to consistently grow earnings at a high compound rate is a defining characteristic of the best companies for long-term investment. Analysts expect SD to grow earnings at a 5.00% annual rate over the next 5 years.Profitability and Returns
Growth doesn’t mean much if it comes at the cost of weak profitability. To adjust for differences in capital structure we’ll use Return on Investment (ROI) as measures of profitability and return. SD’s ROI is 33.30% while AKER has a ROI of -114.00%. The interpretation is that SD’s business generates a higher return on investment than AKER’s.Cash Flow
The value of a stock is simply the present value of its future free cash flows. SD’s free cash flow (“FCF”) per share for the trailing twelve months was -0.12. Comparatively, AKER’s free cash flow per share was -0.02. On a percent-of-sales basis, SD’s free cash flow was -0% while AKER converted -0.05% of its revenues into cash flow. This means that, for a given level of sales, SD is able to generate more free cash flow for investors.Liquidity and Financial Risk
Liquidity and leverage ratios measure a company’s ability to meet short-term obligations and longer-term debts. SD has a current ratio of 0.50 compared to 5.70 for AKER. This means that AKER can more easily cover its most immediate liabilities over the next twelve months. SD’s debt-to-equity ratio is 0.00 versus a D/E of 0.00 for AKER. SD is therefore the more solvent of the two companies, and has lower financial risk.Valuation
SD trades at a forward P/E of 28.46, a P/B of 0.52, and a P/S of 1.23, compared to a P/B of 2.11, and a P/S of 9.65 for AKER. 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. SD is currently priced at a -31.35% to its one-year price target of 17.00. Comparatively, AKER is -93.75% relative to its price target of 4.00. This suggests that AKER is the better investment over the next year.
Insider Activity and Investor Sentiment
Comparing the number of shares sold short to the float is a method analysts often use to get a reading on investor sentiment. SD has a short ratio of 3.70 compared to a short interest of 5.35 for AKER. This implies that the market is currently less bearish on the outlook for SD.Summary
Akers Biosciences, Inc. (NASDAQ:AKER) beats SandRidge Energy, Inc. (NYSE:SD) on a total of 7 of the 14 factors compared between the two stocks. AKER is growing fastly, higher liquidity and has lower financial risk. AKER is more undervalued relative to its price target. Finally, TROX has better sentiment signals based on short interest.