The shares of News Corporation (NASDAQ:NWSA) and Penn National Gaming, Inc. (NASDAQ:PENN) were among the active stocks of the last trading sessions. News Corporation (NASDAQ:NWSA) declined to -0.3% closing at the price of $13.29 whereas the shares of Penn National Gaming, Inc. (NASDAQ:PENN) declined -8.5% with the decrease of -2.79 points closing at the price of $30.04. News Corporation has currently decrease -15.08% in its stock over the period of 6-months while its rival Penn National Gaming, Inc. added 14.13% 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 News Corporation (NASDAQ:NWSA) is -8.3% while the ROI of Penn National Gaming, Inc. (NASDAQ:PENN) is 25%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, NWSA’s EBITDA Margin is 9.99 whereas PENN’s is 8.67.
Both the profitability ratios suggest a mixed sentiment for News Corporation (NASDAQ:NWSA) and Penn National Gaming, Inc. (NASDAQ:PENN).
EPS & Surprise Factor
News Corporation (NASDAQ:NWSA) reported $0.08/share EPS for the previous quarter where analysts were predicting an EPS to be $0.06/share Thus beating the analyst Estimates with a Surprise Factor of 33.3 Percent. While, Penn National Gaming, Inc. (NASDAQ:PENN) reported EPS of $0.57/share in the last quarter. The analysts projected EPS of $0.51/share depicting a Surprise of 11.8 Percent.
Taking a look at Earnings per Share, News Corporation tends to be beating the analyst estimates more than Penn National Gaming, Inc.. so NWSA is more profitable than PENN.
Technical Analysis of News Corporation & Penn National Gaming, Inc.
Moving average convergence divergence (MACD) shows that News Corporation (NASDAQ:NWSA) is on a PRICE RELATIVITY trend While Penn National Gaming, Inc. (NASDAQ:PENN) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the News Corporation was in BULLISH territory and Penn National Gaming, Inc. was in BULLISH territory.
NWSA’s current statistics gauge that the stock candle is BEARISH with MEDIUM volatility. While PENN’s candle is BEARISH with HIGH.
EPS Growth Rate: NWSA’s 23.3% versus PENN’s 0%
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 News Corporation (NASDAQ:NWSA) is predicted at 23.3% while Penn National Gaming, Inc. (NASDAQ:PENN) stands at 0%. These numbers suggest that NWSA 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 NWSA stands at 1.3 while PENN is at 0.6 whereas the debt ratio of the prior is 0.21 while the debt ratio of the later is 164.91.
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 2.9 for NWSA and 2.2 for PENN which means NWSA has Hold rating whereas PENN 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 NWSA is $15.9 which is 16.42% of its current price while PENN has price target of 38.09 which is 21.13% 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.
NWSA currently has price to earning P/E ratio of 0 whereas PENN has 3.5 while the forward P/E ratio for the prior stands at 26.85 and for the later it depicts the value of 15.14.
The price to Book P/B for NWSA is 0.83, Price to Sale is at 0.87 and for PENN these ratios stand at 100.13 and 0.94.