The shares of Oclaro, Inc. (NASDAQ:OCLR) and Sabra Health Care REIT, Inc. (NASDAQ:SBRA) were among the active stocks of the last trading sessions. Oclaro, Inc. (NASDAQ:OCLR) declined to -0.12% closing at the price of $8.5 whereas the shares of Sabra Health Care REIT, Inc. (NASDAQ:SBRA) soared 2.42% with the increase of 0.53 points closing at the price of $22.45. Oclaro, Inc. has currently decrease -8.9% in its stock over the period of 6-months while its rival Sabra Health Care REIT, Inc. added 27.56% 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 Oclaro, Inc. (NASDAQ:OCLR) is 15.1% while the ROI of Sabra Health Care REIT, Inc. (NASDAQ:SBRA) is 1.5%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, OCLR’s EBITDA Margin is 10.95 whereas SBRA’s is 13.86.
Both the profitability ratios suggest a mixed sentiment for Oclaro, Inc. (NASDAQ:OCLR) and Sabra Health Care REIT, Inc. (NASDAQ:SBRA).
EPS & Surprise Factor
Oclaro, Inc. (NASDAQ:OCLR) reported $0.08/share EPS for the previous quarter where analysts were predicting an EPS to be $0.08/share Thus meeting the analyst Estimates with a Surprise Factor of 0 Percent. While, Sabra Health Care REIT, Inc. (NASDAQ:SBRA) reported EPS of $1.08/share in the last quarter. The analysts projected EPS of $0.33/share depicting a Surprise of 227.3 Percent.
Taking a look at Earnings per Share, Sabra Health Care REIT, Inc. tends to be beating the analyst estimates more than Oclaro, Inc.. so SBRA is more profitable than OCLR.
Technical Analysis of Oclaro, Inc. & Sabra Health Care REIT, Inc.
Moving average convergence divergence (MACD) shows that Oclaro, Inc. (NASDAQ:OCLR) is on a PRICE RELATIVITY trend While Sabra Health Care REIT, Inc. (NASDAQ:SBRA) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the Oclaro, Inc. was in BEARISH territory and Sabra Health Care REIT, Inc. was in BEARISH territory.
OCLR’s current statistics gauge that the stock candle is BULLISH with HIGH volatility. While SBRA’s candle is BULLISH with HIGH.
EPS Growth Rate: OCLR’s 14% versus SBRA’s 6%
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 Oclaro, Inc. (NASDAQ:OCLR) is predicted at 14% while Sabra Health Care REIT, Inc. (NASDAQ:SBRA) stands at 6%. These numbers suggest that OCLR 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 OCLR stands at 5 while SBRA is at 0 whereas the debt ratio of the prior is 0.01 while the debt ratio of the later is 1.01.
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 OCLR and 2.6 for SBRA which means OCLR has Hold rating whereas SBRA 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 OCLR is $9.18 which is 7.41% of its current price while SBRA has price target of 23.54 which is 4.63% 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.
OCLR currently has price to earning P/E ratio of 14.99 whereas SBRA has 10.71 while the forward P/E ratio for the prior stands at 16.8 and for the later it depicts the value of 17.16.
The price to Book P/B for OCLR is 2.44, Price to Sale is at 2.79 and for SBRA these ratios stand at 1.18 and 6.54.