The shares of MagneGas Corporation (NASDAQ:MNGA) and General Electric Company (NYSE:GE) were among the active stocks of the last trading sessions. MagneGas Corporation (NASDAQ:MNGA) soared to 74.61% closing at the price of $0.43 whereas the shares of General Electric Company (NYSE:GE) soared 1.3% with the increase of 0.16 points closing at the price of $12.48. MagneGas Corporation has currently decrease -50.58% in its stock over the period of 6-months while its rival General Electric Company subtracted -7.07% 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 MagneGas Corporation (NASDAQ:MNGA) is -143.9% while the ROI of General Electric Company (NYSE:GE) is -0.9%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, MNGA’s EBITDA Margin is -0.57 whereas GE’s is 38.79.
Both the profitability ratios suggest that General Electric Company (NYSE:GE) is more suitable investment in terms of profitability and return.
EPS & Surprise Factor
MagneGas Corporation (NASDAQ:MNGA) reported $-0.24/share EPS for the previous quarter where analysts were predicting an EPS to be $-0.13/share Thus lagging the analyst Estimates with a Surprise Factor of -84.6 Percent. While, General Electric Company (NYSE:GE) reported EPS of $0.19/share in the last quarter. The analysts projected EPS of $0.18/share depicting a Surprise of 5.6 Percent.
Taking a look at Earnings per Share, General Electric Company tends to be beating the analyst estimates more than MagneGas Corporation. so GE is more profitable than MNGA.
Technical Analysis of MagneGas Corporation & General Electric Company
Moving average convergence divergence (MACD) shows that MagneGas Corporation (NASDAQ:MNGA) is on a PRICE RELATIVITY trend While General Electric Company (NYSE:GE) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the MagneGas Corporation was in BULLISH territory and General Electric Company was in BULLISH territory.
MNGA’s current statistics gauge that the stock candle is BEARISH with HIGH volatility. While GE’s candle is BULLISH with HIGH.
EPS Growth Rate: MNGA’s 0% versus GE’s 6.17%
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 MagneGas Corporation (NASDAQ:MNGA) is predicted at 0% while General Electric Company (NYSE:GE) stands at 6.17%. These numbers suggest that GE 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 MNGA stands at 1.4 while GE is at 0 whereas the debt ratio of the prior is 0.08 while the debt ratio of the later is 2.1.
The values of the both ratios suggest that one is more liquid and other investment is more risk free.
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 for MNGA and 2.8 for GE which means MNGA has Buy rating whereas GE 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 MNGA is $6 which is 92.83% of its current price while GE has price target of 16.82 which is 25.8% 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.
MNGA currently has price to earning P/E ratio of 0 whereas GE has 0 while the forward P/E ratio for the prior stands at 0 and for the later it depicts the value of 12.38.
The price to Book P/B for MNGA is 0.47, Price to Sale is at 2.67 and for GE these ratios stand at 1.97 and 0.91.