The shares of Scorpio Tankers Inc. (NYSE:STNG) and Newfield Exploration Company (NYSE:NFX) were among the active stocks of the last trading sessions. Scorpio Tankers Inc. (NYSE:STNG) declined to -1.42% closing at the price of $2.09 whereas the shares of Newfield Exploration Company (NYSE:NFX) declined -1.34% with the decrease of -0.38 points closing at the price of $27.94. Scorpio Tankers Inc. has currently increase 2.45% in its stock over the period of 6-months while its rival Newfield Exploration Company added 7.75% 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 Scorpio Tankers Inc. (NYSE:STNG) is -1.1% while the ROI of Newfield Exploration Company (NYSE:NFX) is 13.4%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, STNG’s EBITDA Margin is 21.36 whereas NFX’s is 7.94.
Both the profitability ratios suggest a mixed sentiment for Scorpio Tankers Inc. (NYSE:STNG) and Newfield Exploration Company (NYSE:NFX).
EPS & Surprise Factor
Scorpio Tankers Inc. (NYSE:STNG) reported $-0.15/share EPS for the previous quarter where analysts were predicting an EPS to be $-0.11/share Thus lagging the analyst Estimates with a Surprise Factor of -36.4 Percent. While, Newfield Exploration Company (NYSE:NFX) reported EPS of $0.94/share in the last quarter. The analysts projected EPS of $0.82/share depicting a Surprise of 14.6 Percent.
Taking a look at Earnings per Share, Newfield Exploration Company tends to be beating the analyst estimates more than Scorpio Tankers Inc.. so NFX is more profitable than STNG.
Technical Analysis of Scorpio Tankers Inc. & Newfield Exploration Company
Moving average convergence divergence (MACD) shows that Scorpio Tankers Inc. (NYSE:STNG) is on a PRICE RELATIVITY trend While Newfield Exploration Company (NYSE:NFX) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the Scorpio Tankers Inc. was in BULLISH territory and Newfield Exploration Company was in BEARISH territory.
STNG’s current statistics gauge that the stock candle is BEARISH with MEDIUM volatility. While NFX’s candle is BEARISH with LOW.
EPS Growth Rate: STNG’s 0% versus NFX’s 31.07%
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 Scorpio Tankers Inc. (NYSE:STNG) is predicted at 0% while Newfield Exploration Company (NYSE:NFX) stands at 31.07%. These numbers suggest that NFX 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 STNG stands at 0.7 while NFX is at 0.7 whereas the debt ratio of the prior is 1.68 while the debt ratio of the later is 1.48.
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 1.6 for STNG and 2.1 for NFX which means STNG has Buy rating whereas NFX 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 STNG is $4.13 which is 49.39% of its current price while NFX has price target of 38 which is 26.47% 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.
STNG currently has price to earning P/E ratio of 0 whereas NFX has 16.23 while the forward P/E ratio for the prior stands at 38.7 and for the later it depicts the value of 6.26.
The price to Book P/B for STNG is 0.4, Price to Sale is at 1.18 and for NFX these ratios stand at 3.41 and 2.55.