The shares of Vipshop Holdings Limited (NYSE:VIPS) and Cleveland-Cliffs Inc. (NYSE:CLF) were among the active stocks of the last trading sessions. Vipshop Holdings Limited (NYSE:VIPS) declined to -3.83% closing at the price of $5.53 whereas the shares of Cleveland-Cliffs Inc. (NYSE:CLF) soared 0.57% with the increase of 0.07 points closing at the price of $12.36. Vipshop Holdings Limited has currently decrease -66.85% in its stock over the period of 6-months while its rival Cleveland-Cliffs Inc. added 83.66% 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 Vipshop Holdings Limited (NYSE:VIPS) is 7% while the ROI of Cleveland-Cliffs Inc. (NYSE:CLF) is 5.5%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, VIPS’s EBITDA Margin is 7.14 whereas CLF’s is 7.93.
Both the profitability ratios suggest a mixed sentiment for Vipshop Holdings Limited (NYSE:VIPS) and Cleveland-Cliffs Inc. (NYSE:CLF).
EPS & Surprise Factor
Vipshop Holdings Limited (NYSE:VIPS) reported $0.12/share EPS for the previous quarter where analysts were predicting an EPS to be $0.14/share Thus lagging the analyst Estimates with a Surprise Factor of -14.3 Percent. While, Cleveland-Cliffs Inc. (NYSE:CLF) reported EPS of $0.55/share in the last quarter. The analysts projected EPS of $0.52/share depicting a Surprise of 5.8 Percent.
Taking a look at Earnings per Share, Cleveland-Cliffs Inc. tends to be beating the analyst estimates more than Vipshop Holdings Limited. so CLF is more profitable than VIPS.
Technical Analysis of Vipshop Holdings Limited & Cleveland-Cliffs Inc.
Moving average convergence divergence (MACD) shows that Vipshop Holdings Limited (NYSE:VIPS) is on a PRICE RELATIVITY trend While Cleveland-Cliffs Inc. (NYSE:CLF) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the Vipshop Holdings Limited was in BEARISH territory and Cleveland-Cliffs Inc. was in BEARISH territory.
VIPS’s current statistics gauge that the stock candle is BEARISH with HIGH volatility. While CLF’s candle is BULLISH with MEDIUM.
EPS Growth Rate: VIPS’s 0.14% versus CLF’s -2.74%
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 Vipshop Holdings Limited (NYSE:VIPS) is predicted at 0.14% while Cleveland-Cliffs Inc. (NYSE:CLF) stands at -2.74%. These numbers suggest that VIPS 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 VIPS stands at 1.1 while CLF is at 3.3 whereas the debt ratio of the prior is 0.41 while the debt ratio of the later is 0.
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 2.6 for VIPS and 2.1 for CLF which means VIPS has Hold rating whereas CLF 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 VIPS is $10.04 which is 44.92% of its current price while CLF has price target of 12.56 which is 1.59% 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.
VIPS currently has price to earning P/E ratio of 11.4 whereas CLF has 25.86 while the forward P/E ratio for the prior stands at 7.97 and for the later it depicts the value of 7.75.
The price to Book P/B for VIPS is 1.57, Price to Sale is at 0.33 and for CLF these ratios stand at 0 and 1.67.