The shares of Allison Transmission Holdings, Inc. (NYSE:ALSN) and Umpqua Holdings Corporation (NASDAQ:UMPQ) were among the active stocks of the last trading sessions. Allison Transmission Holdings, Inc. (NYSE:ALSN) declined to -0.27% closing at the price of $40.91 whereas the shares of Umpqua Holdings Corporation (NASDAQ:UMPQ) declined -0.9% with the decrease of -0.210000000000001 points closing at the price of $23.23. Allison Transmission Holdings, Inc. has currently decrease -8.58% in its stock over the period of 6-months while its rival Umpqua Holdings Corporation added 8.55% 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 Allison Transmission Holdings, Inc. (NYSE:ALSN) is 14.3% while the ROI of Umpqua Holdings Corporation (NASDAQ:UMPQ) is 13.3%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, ALSN’s EBITDA Margin is 8.6 whereas UMPQ’s is Not Available.
Both the profitability ratios suggest a mixed sentiment for Allison Transmission Holdings, Inc. (NYSE:ALSN) and Umpqua Holdings Corporation (NASDAQ:UMPQ).
EPS & Surprise Factor
Allison Transmission Holdings, Inc. (NYSE:ALSN) reported $1.08/share EPS for the previous quarter where analysts were predicting an EPS to be $0.79/share Thus beating the analyst Estimates with a Surprise Factor of 36.7 Percent. While, Umpqua Holdings Corporation (NASDAQ:UMPQ) reported EPS of $0.35/share in the last quarter. The analysts projected EPS of $0.28/share depicting a Surprise of 25 Percent.
Taking a look at Earnings per Share, Allison Transmission Holdings, Inc. tends to be beating the analyst estimates more than Umpqua Holdings Corporation. so ALSN is more profitable than UMPQ.
Technical Analysis of Allison Transmission Holdings, Inc. & Umpqua Holdings Corporation
Moving average convergence divergence (MACD) shows that Allison Transmission Holdings, Inc. (NYSE:ALSN) is on a PRICE RELATIVITY trend While Umpqua Holdings Corporation (NASDAQ:UMPQ) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the Allison Transmission Holdings, Inc. was in BULLISH territory and Umpqua Holdings Corporation was in BULLISH territory.
ALSN’s current statistics gauge that the stock candle is BEARISH with LOW volatility. While UMPQ’s candle is BEARISH with LOW.
EPS Growth Rate: ALSN’s 8.4% versus UMPQ’s 8.5%
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 Allison Transmission Holdings, Inc. (NYSE:ALSN) is predicted at 8.4% while Umpqua Holdings Corporation (NASDAQ:UMPQ) stands at 8.5%. These numbers suggest that UMPQ 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 ALSN stands at 1.6 while UMPQ is at 0 whereas the debt ratio of the prior is 3.6 while the debt ratio of the later is 0.29.
The values of the both ratios suggest that ALSN 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 2.4 for ALSN and 2.6 for UMPQ which means ALSN has Hold rating whereas UMPQ 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 ALSN is $44.23 which is 7.51% of its current price while UMPQ has price target of 25.08 which is 7.38% 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.
ALSN currently has price to earning P/E ratio of 14.08 whereas UMPQ has 20.47 while the forward P/E ratio for the prior stands at 10.08 and for the later it depicts the value of 13.8.
The price to Book P/B for ALSN is 8.05, Price to Sale is at 2.34 and for UMPQ these ratios stand at 1.28 and 5.33.