The shares of TIM Participacoes S.A. (NYSE:TSU) and V.F. Corporation (NYSE:VFC) were among the active stocks of the last trading sessions. TIM Participacoes S.A. (NYSE:TSU) soared to 5.84% closing at the price of $16.13 whereas the shares of V.F. Corporation (NYSE:VFC) soared 1.01% with the increase of 0.92 points closing at the price of $92.39. TIM Participacoes S.A. has currently decrease -23.77% in its stock over the period of 6-months while its rival V.F. Corporation added 18.57% 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 TIM Participacoes S.A. (NYSE:TSU) is 7% while the ROI of V.F. Corporation (NYSE:VFC) is 3.7%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, TSU’s EBITDA Margin is 7.16 whereas VFC’s is 23.23.
Both the profitability ratios suggest a mixed sentiment for TIM Participacoes S.A. (NYSE:TSU) and V.F. Corporation (NYSE:VFC).
EPS & Surprise Factor
TIM Participacoes S.A. (NYSE:TSU) reported $0.2/share EPS for the previous quarter where analysts were predicting an EPS to be $0.2/share Thus meeting the analyst Estimates with a Surprise Factor of 0 Percent. While, V.F. Corporation (NYSE:VFC) reported EPS of $0.43/share in the last quarter. The analysts projected EPS of $0.33/share depicting a Surprise of 30.3 Percent.
Taking a look at Earnings per Share, V.F. Corporation tends to be beating the analyst estimates more than TIM Participacoes S.A.. so VFC is more profitable than TSU.
Technical Analysis of TIM Participacoes S.A. & V.F. Corporation
Moving average convergence divergence (MACD) shows that TIM Participacoes S.A. (NYSE:TSU) is on a PRICE RELATIVITY trend While V.F. Corporation (NYSE:VFC) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the TIM Participacoes S.A. was in BULLISH territory and V.F. Corporation was in BEARISH territory.
TSU’s current statistics gauge that the stock candle is BEARISH with HIGH volatility. While VFC’s candle is BULLISH with MEDIUM.
EPS Growth Rate: TSU’s 22.7% versus VFC’s 13.32%
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 TIM Participacoes S.A. (NYSE:TSU) is predicted at 22.7% while V.F. Corporation (NYSE:VFC) stands at 13.32%. These numbers suggest that TSU 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 TSU stands at 1.1 while VFC is at 1.4 whereas the debt ratio of the prior is 0.3 while the debt ratio of the later is 0.93.
The values of the both ratios suggest that VFC is more suitable investment when the liquidity and risk is the main concern.
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 2.5 for TSU and 2 for VFC which means TSU has Hold rating whereas VFC has Buy 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 TSU is $20.02 which is 19.43% of its current price while VFC has price target of 101.8 which is 9.24% 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.
TSU currently has price to earning P/E ratio of 20.68 whereas VFC has 28.9 while the forward P/E ratio for the prior stands at 14.38 and for the later it depicts the value of 22.3.
The price to Book P/B for TSU is 1.64, Price to Sale is at 1.84 and for VFC these ratios stand at 9.76 and 2.88.