Earnings

Taking Tally Of Harmony Gold Mining Company Limited (HMY), DocuSign, Inc. (DOCU)

The shares of Harmony Gold Mining Company Limited have decreased by more than -14.44% this year alone. The shares recently went up by 5.96% or $0.09 and now trades at $1.60. The shares of DocuSign, Inc. (NASDAQ:DOCU), has jumped by 4.38% year to date as of 12/04/2018. The shares currently trade at $41.47 and have been able to report a change of 2.04% over the past one week.

The stock of Harmony Gold Mining Company Limited and DocuSign, Inc. were two of the most active stocks on Tuesday. 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.

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. The ROI of HMY is -14.50% while that of DOCU is 16.20%. These figures suggest that DOCU ventures generate a higher ROI than that of HMY.

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, HMY’s free cash flow per share is a positive 33.71.

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 HMY is 1.20 and that of DOCU is 2.50. This implies that it is easier for HMY to cover its immediate obligations over the next 12 months than DOCU. The debt ratio of HMY is 0.22 compared to 0.00 for DOCU. HMY can be able to settle its long-term debts and thus is a lower financial risk than DOCU.

Valuation

HMY currently trades at a forward P/E of 3.40, a P/B of 0.39, and a P/S of 0.60 while DOCU trades at a forward P/E of 271.05, a P/B of 9.26, and a P/S of 10.80. This means that looking at the earnings, book values and sales basis, HMY 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 HMY is currently at a -30.43% to its one-year price target of 2.30. Looking at its rival pricing, DOCU is at a -35.08% relative to its price target of 63.88.




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), HMY is given a 3.00 while 2.20 placed for DOCU. This means that analysts are more bullish on the outlook for HMY 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 HMY is 0.94 while that of DOCU is just 2.75. This means that analysts are more bullish on the forecast for HMY stock.

Conclusion

The stock of DocuSign, Inc. defeats that of Harmony Gold Mining Company Limited when the two are compared, with DOCU taking 5 out of the total factors that were been considered. DOCU 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, DOCU is the cheaper one on an earnings, book value and sales basis. Finally, the sentiment signal for DOCU is better on when it is viewed on short interest.

Previous ArticleNext Article

Related Post

Which of these 2 stocks can turn out to be absolut... The shares of Halliburton Company have decreased by more than -34.93% this year alone. The shares recently went up by 3.58% or $1.1 and now trades at ...
BEST Inc. (BSTI): How Do the Books Stack Up? It's worth it to have a look at BEST Inc. (NYSE:BSTI) as there may be a chasm between the bulls and the bears as far as recent trading activity goes. ...
A Comparison of Top Movers: Regions Financial Corp... The shares of Regions Financial Corporation have decreased by more than -20.25% this year alone. The shares recently went down by -3.37% or -$0.48 and...
Steel Dynamics, Inc. (STLD) vs. Axsome Therapeutic... Steel Dynamics, Inc. (NASDAQ:STLD) shares are down more than -26.25% this year and recently decreased -1.55% or -$0.5 to settle at $31.81. Axsome Ther...
A Comparison of Top Movers: Banco Bradesco S.A. (B... The shares of Banco Bradesco S.A. have increased by more than 4.79% this year alone. The shares recently went up by 0.10% or $0.01 and now trades at $...