The shares of Peabody Energy Corporation have decreased by more than -22.10% this year alone. The shares recently went down by -6.24% or -$2.04 and now trades at $30.67. The shares of Apollo Global Management, LLC (NYSE:APO), has slumped by -20.11% year to date as of 12/06/2018. The shares currently trade at $26.74 and have been able to report a change of -5.68% over the past one week.
The stock of Peabody Energy Corporation and Apollo Global Management, LLC were two of the most active stocks on Thursday. 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. BTU has an EBITDA margin of 0.37%, this implies that the underlying business of APO is more profitable. The ROI of BTU is 25.30% while that of APO is 33.10%. These figures suggest that APO ventures generate a higher ROI than that of BTU.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, BTU’s free cash flow per share is a positive 6.14, while that of APO is positive 11.96.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 debt ratio of BTU is 0.42 compared to 2.09 for APO. APO can be able to settle its long-term debts and thus is a lower financial risk than BTU.Valuation
BTU currently trades at a forward P/E of 13.54, a P/B of 1.12, and a P/S of 0.62 while APO trades at a forward P/E of 8.44, a P/B of 4.99, and a P/S of 2.63. This means that looking at the earnings, book values and sales basis, BTU 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 BTU is currently at a -32.49% to its one-year price target of 45.43. Looking at its rival pricing, APO is at a -30.69% relative to its price target of 38.58.
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), BTU is given a 2.30 while 1.90 placed for APO. This means that analysts are more bullish on the outlook for BTU 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 BTU is 1.70 while that of APO is just 5.86. This means that analysts are more bullish on the forecast for BTU stock.
The stock of Apollo Global Management, LLC defeats that of Peabody Energy Corporation when the two are compared, with APO taking 5 out of the total factors that were been considered. APO 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, APO is the cheaper one on an earnings, book value and sales basis. Finally, the sentiment signal for APO is better on when it is viewed on short interest.