Earnings

A Comparison of Top Movers: Ur-Energy Inc. (URG), Clean Energy Fuels Corp. (CLNE)

The shares of Ur-Energy Inc. have increased by more than 9.20% this year alone. The shares recently went down by -3.05% or -$0.02 and now trades at $0.75. The shares of Clean Energy Fuels Corp. (NASDAQ:CLNE), has jumped by 15.76% year to date as of 10/10/2018. The shares currently trade at $2.35 and have been able to report a change of -9.96% over the past one week.

The stock of Ur-Energy Inc. and Clean Energy Fuels Corp. were two of the most active stocks on Wednesday. Investors seem to be very interested in what happens to the stocks of these two companies but do investors favor one over the other? We will analyze the growth, profitability, risk, valuation, and insider trends of both companies and see which one investors prefer.

Next 5Y EPS Growth: 35.00% versus 25.00%

When a company is able to grow consistently in terms of earnings at a high compound rate have the highest likelihood of creating value for its shareholders over time. Analysts have predicted that URG will grow it’s earning at a 35.00% annual rate in the next 5 years. This is in contrast to CLNE which will have a positive growth at a 25.00% annual rate. This means that the higher growth rate of URG implies a greater potential for capital appreciation over the years.

Profitability and Returns

Growth alone cannot be used to see if the company will be valuable. Shareholders will be the losers if a company invest in ventures that aren’t profitable enough to support upbeat growth. In order for us to accurately measure profitability and return, we will be using the EBITDA margin and Return on Investment (ROI), which balances the difference in capital structure. URG has an EBITDA margin of 13.94%, this implies that the underlying business of URG is more profitable. The ROI of URG is 3.30% while that of CLNE is -10.10%. These figures suggest that URG ventures generate a higher ROI than that of CLNE.

Cash Flow



The value of a stock is ultimately determined by the amount of cash flow that the investors have available. Over the last 12 months, URG’s free cash flow per share is a negative -0.01, while that of CLNE is positive 0.01.

Liquidity and Financial Risk

The ability of a company to meet up with its short-term obligations and be able to clear its longer-term debts is measured using Liquidity and leverage ratios. The current ratio for URG is 1.10 and that of CLNE is 2.10. This implies that it is easier for URG to cover its immediate obligations over the next 12 months than CLNE. The debt ratio of URG is 0.35 compared to 0.47 for CLNE. CLNE can be able to settle its long-term debts and thus is a lower financial risk than URG.

Valuation

URG currently trades at a P/B of 2.26, and a P/S of 3.52 while CLNE trades at a P/B of 0.75, and a P/S of 1.42. This means that looking at the earnings, book values and sales basis, URG is the cheaper one. It is very obvious that earnings are the most important factors to investors, thus analysts are most likely to place their bet on the P/E.

Analyst Price Targets and Opinions




The mistake some people make is that they think a cheap stock has more value to it. In order to know the value of a stock, there is need to compare its current price to its likely trading price in the future. The price of URG is currently at a -37.5% to its one-year price target of 1.20. Looking at its rival pricing, CLNE is at a -63.85% relative to its price target of 6.50.

When looking at the investment recommendation on say a scale of 1 to 5 (1 being a strong buy, 3 a hold, and 5 a sell), URG is given a 1.70 while 2.70 placed for CLNE. This means that analysts are more bullish on the outlook for CLNE stocks.

Insider Activity and Investor Sentiment

Short interest or otherwise called the percentage of a stock’s tradable shares currently being shorted is another data that investors use to get a handle on sentiment. The short ratio for URG is 1.87 while that of CLNE is just 2.88. This means that analysts are more bullish on the forecast for URG stock.

Conclusion

The stock of Clean Energy Fuels Corp. defeats that of Ur-Energy Inc. when the two are compared, with CLNE taking 6 out of the total factors that were been considered. CLNE happens to be more profitable, generates a higher ROI, has higher cash flow per share, higher liquidity and has a lower financial risk. When looking at the stock valuation, CLNE is the cheaper one on an earnings, book value and sales basis. Finally, the sentiment signal for CLNE is better on when it is viewed on short interest.

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