The shares of India Globalization Capital Inc. (NYSE:IGC) and Bank of America Corporation (NYSE:BAC) were among the active stocks of the last trading sessions. India Globalization Capital Inc. (NYSE:IGC) soared to 66.42% closing at the price of $6.74 whereas the shares of Bank of America Corporation (NYSE:BAC) soared 0.13% with the increase of 0.04 points closing at the price of $30.27. India Globalization Capital Inc. has currently increase 1146.07% in its stock over the period of 6-months while its rival Bank of America Corporation subtracted -0.69% 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 India Globalization Capital Inc. (NYSE:IGC) is -17.4% while the ROI of Bank of America Corporation (NYSE:BAC) is 4.8%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, IGC’s EBITDA Margin is -67.45 whereas BAC’s is NOT AVAILABLE.
Both the profitability ratios suggest that Bank of America Corporation (NYSE:BAC) is more suitable investment in terms of profitability and return.
EPS & Surprise Factor
Technical Analysis of India Globalization Capital Inc. & Bank of America Corporation
Moving average convergence divergence (MACD) shows that India Globalization Capital Inc. (NYSE:IGC) is on a PRICE RELATIVITY trend While Bank of America Corporation (NYSE:BAC) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the India Globalization Capital Inc. was in BULLISH territory and Bank of America Corporation was in BULLISH territory.
IGC’s current statistics gauge that the stock candle is BULLISH with HIGH volatility. While BAC’s candle is BULLISH with MEDIUM.
EPS Growth Rate: IGC’s 0% versus BAC’s 29.2%
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 India Globalization Capital Inc. (NYSE:IGC) is predicted at 0% while Bank of America Corporation (NYSE:BAC) stands at 29.2%. These numbers suggest that BAC 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 IGC stands at 1.1 while BAC is at 0 whereas the debt ratio of the prior is 0.26 while the debt ratio of the later is 1.79.
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 0 for IGC and 2 for BAC which means IGC has Strong Buy rating whereas BAC has Buy rating.
Valuation is the process of determining the company’s worth for an investor, the valuation ratios give an insight to that worthiness.
IGC currently has price to earning P/E ratio of 0 whereas BAC has 14.27 while the forward P/E ratio for the prior stands at 0 and for the later it depicts the value of 10.44.
The price to Book P/B for IGC is 28.08, Price to Sale is at 98.87 and for BAC these ratios stand at 1.28 and 4.93.