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A Side-by-side Analysis of OncoSec Medical Incorporated (ONCS) and C.H. Robinson Worldwide, Inc. (CHRW)

OncoSec Medical Incorporated (NASDAQ:ONCS) shares are down more than -46.44% this year and recently decreased -1.10% or -$0.01 to settle at $0.87. C.H. Robinson Worldwide, Inc. (NASDAQ:CHRW), on the other hand, is up 1.08% year to date as of 12/06/2018. It currently trades at $90.05 and has returned -2.00% during the past week.

OncoSec Medical Incorporated (NASDAQ:ONCS) and C.H. Robinson Worldwide, Inc. (NASDAQ:CHRW) are the two most active stocks based on recent 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

Companies that can increase earnings at a high compound rate over time are attractive to investors. Comparatively, CHRW is expected to grow at a 14.94% annual rate. All else equal, CHRW’s higher growth rate would imply a greater potential for capital appreciation.

Profitability and Returns

A high growth rate isn’t necessarily valuable to investors. In fact, companies that overinvest in low return projects just to achieve a high growth rate can actually destroy shareholder value. Profitability and returns are a measure of the quality of a company’s business and its growth opportunities. We’ll use EBITDA margin and Return on Investment (ROI) to measure this. EBITDA margin of 5.61% for C.H. Robinson Worldwide, Inc. (CHRW).

Cash Flow



If there’s one thing investors care more about than earnings, it’s cash flow. ONCS’s free cash flow (“FCF”) per share for the trailing twelve months was -0.12. Comparatively, CHRW’s free cash flow per share was +1.00.

Liquidity and Financial Risk

Analysts look at liquidity and leverage ratios to assess how easily a company can cover its liabilities. ONCS has a current ratio of 4.90 compared to 1.90 for CHRW. This means that ONCS can more easily cover its most immediate liabilities over the next twelve months. ONCS’s debt-to-equity ratio is 0.00 versus a D/E of 0.90 for CHRW. CHRW is therefore the more solvent of the two companies, and has lower financial risk.

Valuation

ONCS trades at a P/B of 2.02, compared to a forward P/E of 18.09, a P/B of 7.98, and a P/S of 0.76 for CHRW. ONCS is the cheaper of the two stocks on an earnings, book value and sales basis. 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

Just because a stock is cheaper doesn’t mean there’s more value to be had. In order to assess value we need to compare the current price to where it’s likely to trade in the future. ONCS is currently priced at a -71% to its one-year price target of 3.00. Comparatively, CHRW is -7.91% relative to its price target of 97.79. This suggests that ONCS is the better investment over the next year.

Risk and Volatility

Beta is an important measure that gives investors a sense of the market risk associated with a particular stock. A beta above 1 signals above average market risk, while a beta below 1 implies below average volatility. ONCS has a beta of 2.23 and CHRW’s beta is 0.55. CHRW’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. ONCS has a short ratio of 2.32 compared to a short interest of 8.87 for CHRW. This implies that the market is currently less bearish on the outlook for ONCS.

Summary

OncoSec Medical Incorporated (NASDAQ:ONCS) beats C.H. Robinson Worldwide, Inc. (NASDAQ:CHRW) on a total of 8 of the 13 factors compared between the two stocks. ONCS higher liquidity and has lower financial risk. In terms of valuation, ONCS is the cheaper of the two stocks on an earnings, book value and sales basis, ONCS is more undervalued relative to its price target. Finally, ONCS has better sentiment signals based on short interest.

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