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Should You Buy The Meet Group, Inc. (MEET) or Micro Focus International plc (MFGP)?

Micro Focus International plc (NYSE:MFGP), on the other hand, is down -43.58% year to date as of 12/06/2018. It currently trades at $18.95 and has returned -5.25% during the past week.

The Meet Group, Inc. (NASDAQ:MEET) and Micro Focus International plc (NYSE:MFGP) are the two most active stocks based on recent trading volumes. The market is clearly enthusiastic about both these stocks, but which is the better investment? To answer this, we will compare the two companies based on the strength of their growth, profitability, risk, returns, valuation, analyst recommendations, and insider trends.

Growth

One of the key things investors look for in a company is the ability to grow earnings at a high compound rate over time. Analysts expect MEET to grow earnings at a 20.00% annual rate over the next 5 years.

Cash Flow

The amount of free cash flow available to investors is ultimately what determines the value of a stock. MEET’s free cash flow (“FCF”) per share for the trailing twelve months was +0.11. Comparatively, MFGP’s free cash flow per share was -. On a percent-of-sales basis, MEET’s free cash flow was 0.01% while MFGP converted 0% of its revenues into cash flow. This means that, for a given level of sales, MEET is able to generate more free cash flow for investors.

Valuation

MEET trades at a forward P/E of 10.47, a P/B of 1.55, and a P/S of 1.77, compared to a P/B of 1.01, and a P/S of 2.58 for MFGP. MEET is the cheaper of the two stocks on sales basis but is expensive in terms of P/E and P/B ratio. 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. MEET is currently priced at a -39.06% to its one-year price target of 6.58.

Insider Activity and Investor Sentiment



Short interest, or the percentage of a stock’s tradable shares currently being shorted, is another metric investors use to get a pulse on sentiment. MEET has a short ratio of 8.55 compared to a short interest of 1.97 for MFGP. This implies that the market is currently less bearish on the outlook for MFGP.

Summary

Micro Focus International plc (NYSE:MFGP) beats The Meet Group, Inc. (NASDAQ:MEET) on a total of 7 of the 13 factors compared between the two stocks. MFGP is growing fastly and has lower financial risk. In terms of valuation, MFGP is the cheaper of the two stocks on an earnings and book value, Finally, MFGP has better sentiment signals based on short interest.

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