The shares of MSC Industrial Direct Company, Inc. (NYSE:MSM) and TIM Participacoes S.A. (NYSE:TSU) were among the active stocks of the last trading sessions. MSC Industrial Direct Company, Inc. (NYSE:MSM) declined to -0.59% closing at the price of $84.64 whereas the shares of TIM Participacoes S.A. (NYSE:TSU) soared 0.06% with the increase of 0.0100000000000016 points closing at the price of $17.25. MSC Industrial Direct Company, Inc. has currently decrease -13.97% in its stock over the period of 6-months while its rival TIM Participacoes S.A. subtracted -13.5% in the previous 6-months.
Now we have to analyze the facts that if the stocks were worthy off investors’ money, The facts to analyze here are risks, profitability, returns and price trends.
Returns and Profitability
Profitability and returns are the main reason of investment, the investors are looking for profits that they get and return they should expect over the period of time.
The first and foremost return that is considered while making an investment is the ROI or Return on Investment. The ROI is the ratio between the profit against the cost of investment. Currently the ROI of MSC Industrial Direct Company, Inc. (NYSE:MSM) is 13.8% while the ROI of TIM Participacoes S.A. (NYSE:TSU) is 7%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, MSM’s EBITDA Margin is 11.11 whereas TSU’s is 7.49.
Both the profitability ratios suggest that MSC Industrial Direct Company, Inc. (NYSE:MSM) is more suitable investment in terms of profitability and return.
EPS & Surprise Factor
MSC Industrial Direct Company, Inc. (NYSE:MSM) reported $1.34/share EPS for the previous quarter where analysts were predicting an EPS to be $1.32/share Thus beating the analyst Estimates with a Surprise Factor of 1.5 Percent. While, TIM Participacoes S.A. (NYSE:TSU) reported EPS of $0.16/share in the last quarter. The analysts projected EPS of $0.14/share depicting a Surprise of 14.3 Percent.
Taking a look at Earnings per Share, TIM Participacoes S.A. tends to be beating the analyst estimates more than MSC Industrial Direct Company, Inc.. so TSU is more profitable than MSM.
Technical Analysis of MSC Industrial Direct Company, Inc. & TIM Participacoes S.A.
Moving average convergence divergence (MACD) shows that MSC Industrial Direct Company, Inc. (NYSE:MSM) is on a PRICE RELATIVITY trend While TIM Participacoes S.A. (NYSE:TSU) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the MSC Industrial Direct Company, Inc. was in BEARISH territory and TIM Participacoes S.A. was in BULLISH territory.
MSM’s current statistics gauge that the stock candle is BEARISH with MEDIUM volatility. While TSU’s candle is BEARISH with MEDIUM.
EPS Growth Rate: MSM’s 11.7% versus TSU’s 22.9%
Another shareholder value can be analyzed through the EPS growth rate; the next 5 years EPS growth rate is predicted by the analysts after the analyzing the previous trends. The next 5 year EPS growth rate of MSC Industrial Direct Company, Inc. (NYSE:MSM) is predicted at 11.7% while TIM Participacoes S.A. (NYSE:TSU) stands at 22.9%. These numbers suggest that TSU is more suitable investment in terms of EPS growth rate.
Financial Risk and Liquidity Concerns
The current ratio and the debt ratio are the two ratios that show the investor how quickly the company is able to payout its debt and how quickly it can cover its obligations. The current ratio of MSM stands at 2.2 while TSU is at 1.1 whereas the debt ratio of the prior is 0.38 while the debt ratio of the later is 0.32.
The values of the both ratios suggest that MSM is more suitable investment when the liquidity and risk is the main concern.
While making an investment, another main factor to consider before investing is the analyst recommendation on the scale of 1 to 5 where 1 is strong buy, 2 is buy, 3 is hold, 4 is Sell and 5 is strong sell. Analyst recommend 2.6 for MSM and 2.4 for TSU which means MSM has Hold rating whereas TSU has Hold rating.
Another recommendation of analyst that is to be considered worthy is the price target. The mare price or price trend does not suggest the suitability of a stock. The price target set by analyst is also to be considered while investing as it suggests to what extent the stock will rise or fall in the near future. The price target set for MSM is $101.67 which is 16.75% of its current price while TSU has price target of 20.61 which is 16.3% of its current price.
Valuation is the process of determining the company’s worth for an investor, the valuation ratios give an insight to that worthiness.
MSM currently has price to earning P/E ratio of 18.61 whereas TSU has 24.36 while the forward P/E ratio for the prior stands at 13.86 and for the later it depicts the value of 14.85.
The price to Book P/B for MSM is 3.55, Price to Sale is at 1.6 and for TSU these ratios stand at 1.79 and 1.98.