The shares of AmTrust Financial Services, Inc. (NASDAQ:AFSI) and United Rentals, Inc. (NYSE:URI) were among the active stocks of the last trading sessions. AmTrust Financial Services, Inc. (NASDAQ:AFSI) declined to -0.34% closing at the price of $14.51 whereas the shares of United Rentals, Inc. (NYSE:URI) declined -0.53% with the decrease of -0.820000000000022 points closing at the price of $154.29. AmTrust Financial Services, Inc. has currently increase 43.1% in its stock over the period of 6-months while its rival United Rentals, Inc. subtracted -10.53% 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 AmTrust Financial Services, Inc. (NASDAQ:AFSI) is -6.4% while the ROI of United Rentals, Inc. (NYSE:URI) is 8.9%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, AFSI’s EBITDA Margin is -7.73 whereas URI’s is 10.38.
Both the profitability ratios suggest that United Rentals, Inc. (NYSE:URI) is more suitable investment in terms of profitability and return.
EPS & Surprise Factor
AmTrust Financial Services, Inc. (NASDAQ:AFSI) reported $3.36/share EPS for the previous quarter where analysts were predicting an EPS to be $0.27/share Thus beating the analyst Estimates with a Surprise Factor of 1144.4 Percent. While, United Rentals, Inc. (NYSE:URI) reported EPS of $2.87/share in the last quarter. The analysts projected EPS of $2.45/share depicting a Surprise of 17.1 Percent.
Taking a look at Earnings per Share, AmTrust Financial Services, Inc. tends to be beating the analyst estimates more than United Rentals, Inc.. so AFSI is more profitable than URI.
Technical Analysis of AmTrust Financial Services, Inc. & United Rentals, Inc.
Moving average convergence divergence (MACD) shows that AmTrust Financial Services, Inc. (NASDAQ:AFSI) is on a PRICE RELATIVITY trend While United Rentals, Inc. (NYSE:URI) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the AmTrust Financial Services, Inc. was in BULLISH territory and United Rentals, Inc. was in BULLISH territory.
AFSI’s current statistics gauge that the stock candle is NEUTRAL with LOW volatility. While URI’s candle is BEARISH with MEDIUM.
EPS Growth Rate: AFSI’s 10% versus URI’s 19.7%
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 AmTrust Financial Services, Inc. (NASDAQ:AFSI) is predicted at 10% while United Rentals, Inc. (NYSE:URI) stands at 19.7%. These numbers suggest that URI 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 AFSI stands at 0 while URI is at 1 whereas the debt ratio of the prior is 0.51 while the debt ratio of the later is 2.99.
The values of the both ratios suggest that URI 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 3 for AFSI and 2.2 for URI which means AFSI has Hold rating whereas URI 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 AFSI is $12.75 which is -13.8% of its current price while URI has price target of 189.58 which is 18.61% 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.
AFSI currently has price to earning P/E ratio of 19.22 whereas URI has 18.05 while the forward P/E ratio for the prior stands at 9.07 and for the later it depicts the value of 8.93.
The price to Book P/B for AFSI is 1, Price to Sale is at 0.47 and for URI these ratios stand at 4.25 and 1.85.