The shares of PNC Financial Services Group, Inc. (The) (NYSE:PNC) and Cree, Inc. (NASDAQ:CREE) were among the active stocks of the last trading sessions. PNC Financial Services Group, Inc. (The) (NYSE:PNC) soared to 0.89% closing at the price of $139.75 whereas the shares of Cree, Inc. (NASDAQ:CREE) declined -0.28% with the decrease of -0.1 points closing at the price of $35.69. PNC Financial Services Group, Inc. (The) has currently decrease -7.78% in its stock over the period of 6-months while its rival Cree, Inc. subtracted -15.75% 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 PNC Financial Services Group, Inc. (The) (NYSE:PNC) is 8.6% while the ROI of Cree, Inc. (NASDAQ:CREE) is -13.4%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, PNC’s EBITDA Margin is NOT AVAILABLE whereas CREE’s is 48.63.
Both the profitability ratios suggest that PNC Financial Services Group, Inc. (The) (NYSE:PNC) is more suitable investment in terms of profitability and return.
EPS & Surprise Factor
PNC Financial Services Group, Inc. (The) (NYSE:PNC) reported $2.72/share EPS for the previous quarter where analysts were predicting an EPS to be $2.58/share Thus beating the analyst Estimates with a Surprise Factor of 5.4 Percent. While, Cree, Inc. (NASDAQ:CREE) reported EPS of $0.11/share in the last quarter. The analysts projected EPS of $0.08/share depicting a Surprise of 37.5 Percent.
Taking a look at Earnings per Share, Cree, Inc. tends to be beating the analyst estimates more than PNC Financial Services Group, Inc. (The). so CREE is more profitable than PNC.
Technical Analysis of PNC Financial Services Group, Inc. (The) & Cree, Inc.
Moving average convergence divergence (MACD) shows that PNC Financial Services Group, Inc. (The) (NYSE:PNC) is on a PRICE RELATIVITY trend While Cree, Inc. (NASDAQ:CREE) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the PNC Financial Services Group, Inc. (The) was in BULLISH territory and Cree, Inc. was in BEARISH territory.
PNC’s current statistics gauge that the stock candle is BULLISH with MEDIUM volatility. While CREE’s candle is BEARISH with MEDIUM.
EPS Growth Rate: PNC’s 11.55% versus CREE’s 0%
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 PNC Financial Services Group, Inc. (The) (NYSE:PNC) is predicted at 11.55% while Cree, Inc. (NASDAQ:CREE) stands at 0%. These numbers suggest that PNC 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 PNC stands at 0 while CREE is at 3.6 whereas the debt ratio of the prior is 0.79 while the debt ratio of the later is 0.14.
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 2.4 for PNC and 2.5 for CREE which means PNC has Hold rating whereas CREE 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 PNC is $158.91 which is 12.06% of its current price while CREE has price target of 47.6 which is 25.02% 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.
PNC currently has price to earning P/E ratio of 15.49 whereas CREE has 0 while the forward P/E ratio for the prior stands at 12.01 and for the later it depicts the value of 28.57.
The price to Book P/B for PNC is 1.4, Price to Sale is at 5.61 and for CREE these ratios stand at 1.74 and 2.5.