The shares of Advanced Micro Devices, Inc. (NASDAQ:AMD) and Bank of America Corporation (NYSE:BAC) were among the active stocks of the last trading sessions. Advanced Micro Devices, Inc. (NASDAQ:AMD) declined to -1.55% closing at the price of $27.35 whereas the shares of Bank of America Corporation (NYSE:BAC) declined -0.66% with the decrease of -0.2 points closing at the price of $30.23. Advanced Micro Devices, Inc. has currently increase 186.99% in its stock over the period of 6-months while its rival Bank of America Corporation added 1.21% 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 Advanced Micro Devices, Inc. (NASDAQ:AMD) is -48.1% while the ROI of Bank of America Corporation (NYSE:BAC) is 4.8%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, AMD’s EBITDA Margin is 50.62 whereas BAC’s is NOT AVAILABLE.
Both the profitability ratios suggest that Bank of America Corporation (NYSE:BAC) is more suitable investment in terms of profitability and return.
EPS & Surprise Factor
Advanced Micro Devices, Inc. (NASDAQ:AMD) reported $0.14/share EPS for the previous quarter where analysts were predicting an EPS to be $0.13/share Thus beating the analyst Estimates with a Surprise Factor of 7.7 Percent. While, Bank of America Corporation (NYSE:BAC) reported EPS of $0.63/share in the last quarter. The analysts projected EPS of $0.57/share depicting a Surprise of 10.5 Percent.
Taking a look at Earnings per Share, Bank of America Corporation tends to be beating the analyst estimates more than Advanced Micro Devices, Inc.. so BAC is more profitable than AMD.
Technical Analysis of Advanced Micro Devices, Inc. & Bank of America Corporation
Moving average convergence divergence (MACD) shows that Advanced Micro Devices, Inc. (NASDAQ:AMD) is on a PRICE RELATIVITY trend While Bank of America Corporation (NYSE:BAC) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the Advanced Micro Devices, Inc. was in BEARISH territory and Bank of America Corporation was in BEARISH territory.
AMD’s current statistics gauge that the stock candle is BEARISH with HIGH volatility. While BAC’s candle is BEARISH with MEDIUM.
EPS Growth Rate: AMD’s 0.56% versus BAC’s 29.2%
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 Advanced Micro Devices, Inc. (NASDAQ:AMD) is predicted at 0.56% while Bank of America Corporation (NYSE:BAC) stands at 29.2%. These numbers suggest that BAC 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 AMD stands at 1.7 while BAC is at 0 whereas the debt ratio of the prior is 1.58 while the debt ratio of the later is 1.79.
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 2.7 for AMD and 2 for BAC which means AMD has Hold rating whereas BAC has Buy 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 AMD is $25.67 which is -6.54% of its current price while BAC has price target of 34.77 which is 13.06% 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.
AMD currently has price to earning P/E ratio of 0 whereas BAC has 14.25 while the forward P/E ratio for the prior stands at 40.7 and for the later it depicts the value of 10.42.
The price to Book P/B for AMD is 30.39, Price to Sale is at 4.15 and for BAC these ratios stand at 1.28 and 4.93.