The shares of Ford Motor Company (NYSE:F) and Micron Technology, Inc. (NASDAQ:MU) were among the active stocks of the last trading sessions. Ford Motor Company (NYSE:F) declined to -0.33% closing at the price of $9.12 whereas the shares of Micron Technology, Inc. (NASDAQ:MU) declined -1.31% with the decrease of -0.58 points closing at the price of $43.58. Ford Motor Company has currently decrease -18.93% in its stock over the period of 6-months while its rival Micron Technology, Inc. subtracted -9.13% 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 Ford Motor Company (NYSE:F) is 2% while the ROI of Micron Technology, Inc. (NASDAQ:MU) is 19.2%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, F’s EBITDA Margin is 11.91 whereas MU’s is 2.55.
Both the profitability ratios suggest a mixed sentiment for Ford Motor Company (NYSE:F) and Micron Technology, Inc. (NASDAQ:MU).
EPS & Surprise Factor
Ford Motor Company (NYSE:F) reported $0.27/share EPS for the previous quarter where analysts were predicting an EPS to be $0.31/share Thus lagging the analyst Estimates with a Surprise Factor of -12.9 Percent. While, Micron Technology, Inc. (NASDAQ:MU) reported EPS of $3.53/share in the last quarter. The analysts projected EPS of $3.34/share depicting a Surprise of 5.7 Percent.
Taking a look at Earnings per Share, Micron Technology, Inc. tends to be beating the analyst estimates more than Ford Motor Company. so MU is more profitable than F.
Technical Analysis of Ford Motor Company & Micron Technology, Inc.
Moving average convergence divergence (MACD) shows that Ford Motor Company (NYSE:F) is on a PRICE RELATIVITY trend While Micron Technology, Inc. (NASDAQ:MU) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the Ford Motor Company was in BEARISH territory and Micron Technology, Inc. was in BEARISH territory.
F’s current statistics gauge that the stock candle is BEARISH with LOW volatility. While MU’s candle is BEARISH with LOW.
EPS Growth Rate: F’s 15% versus MU’s 24.95%
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 Ford Motor Company (NYSE:F) is predicted at 15% while Micron Technology, Inc. (NASDAQ:MU) stands at 24.95%. These numbers suggest that MU 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 F stands at 1.2 while MU is at 2.6 whereas the debt ratio of the prior is 4.19 while the debt ratio of the later is 0.26.
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 F and 2.1 for MU which means F has Hold rating whereas MU 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 F is $10.67 which is 14.53% of its current price while MU has price target of 68.53 which is 36.41% 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.
F currently has price to earning P/E ratio of 5.72 whereas MU has 3.83 while the forward P/E ratio for the prior stands at 6.66 and for the later it depicts the value of 4.42.
The price to Book P/B for F is 1, Price to Sale is at 0.23 and for MU these ratios stand at 1.76 and 1.69.