The shares of Zayo Group Holdings, Inc. (NYSE:ZAYO) and Olin Corporation (NYSE:OLN) were among the active stocks of the last trading sessions. Zayo Group Holdings, Inc. (NYSE:ZAYO) declined to -0.55% closing at the price of $32.8 whereas the shares of Olin Corporation (NYSE:OLN) soared 1.65% with the increase of 0.41 points closing at the price of $25.19. Zayo Group Holdings, Inc. has currently decrease -8.07% in its stock over the period of 6-months while its rival Olin Corporation subtracted -15.7% 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 Zayo Group Holdings, Inc. (NYSE:ZAYO) is 5.7% while the ROI of Olin Corporation (NYSE:OLN) is 5.1%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, ZAYO’s EBITDA Margin is 11.51 whereas OLN’s is 6.62.
Both the profitability ratios suggest that Zayo Group Holdings, Inc. (NYSE:ZAYO) is more suitable investment in terms of profitability and return.
EPS & Surprise Factor
Zayo Group Holdings, Inc. (NYSE:ZAYO) reported $0.18/share EPS for the previous quarter where analysts were predicting an EPS to be $0.09/share Thus beating the analyst Estimates with a Surprise Factor of 100 Percent. While, Olin Corporation (NYSE:OLN) reported EPS of $0.48/share in the last quarter. The analysts projected EPS of $0.4/share depicting a Surprise of 20 Percent.
Taking a look at Earnings per Share, Zayo Group Holdings, Inc. tends to be beating the analyst estimates more than Olin Corporation. so ZAYO is more profitable than OLN.
Technical Analysis of Zayo Group Holdings, Inc. & Olin Corporation
Moving average convergence divergence (MACD) shows that Zayo Group Holdings, Inc. (NYSE:ZAYO) is on a PRICE RELATIVITY trend While Olin Corporation (NYSE:OLN) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the Zayo Group Holdings, Inc. was in BEARISH territory and Olin Corporation was in BEARISH territory.
ZAYO’s current statistics gauge that the stock candle is BEARISH with HIGH volatility. While OLN’s candle is BULLISH with HIGH.
EPS Growth Rate: ZAYO’s 22.67% versus OLN’s 40.1%
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 Zayo Group Holdings, Inc. (NYSE:ZAYO) is predicted at 22.67% while Olin Corporation (NYSE:OLN) stands at 40.1%. These numbers suggest that OLN 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 ZAYO stands at 1 while OLN is at 1.8 whereas the debt ratio of the prior is 3.91 while the debt ratio of the later is 1.27.
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 1.8 for ZAYO and 2.1 for OLN which means ZAYO has Buy rating whereas OLN 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 ZAYO is $42.47 which is 22.77% of its current price while OLN has price target of 36.54 which is 31.06% 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.
ZAYO currently has price to earning P/E ratio of 64.44 whereas OLN has 23.22 while the forward P/E ratio for the prior stands at 52.82 and for the later it depicts the value of 9.63.
The price to Book P/B for ZAYO is 5.45, Price to Sale is at 3.19 and for OLN these ratios stand at 1.52 and 0.64.