The shares of IHS Markit Ltd. (NASDAQ:INFO) and Gol Linhas Aereas Inteligentes S.A. (NYSE:GOL) were among the active stocks of the last trading sessions. IHS Markit Ltd. (NASDAQ:INFO) soared to 0.51% closing at the price of $53.12 whereas the shares of Gol Linhas Aereas Inteligentes S.A. (NYSE:GOL) soared 3.39% with the increase of 0.26 points closing at the price of $7.93. IHS Markit Ltd. has currently increase 9.87% in its stock over the period of 6-months while its rival Gol Linhas Aereas Inteligentes S.A. subtracted -38.62% 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 IHS Markit Ltd. (NASDAQ:INFO) is 4.7% while the ROI of Gol Linhas Aereas Inteligentes S.A. (NYSE:GOL) is 36.8%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, INFO’s EBITDA Margin is 21.17 whereas GOL’s is 6.74.
Both the profitability ratios suggest a mixed sentiment for IHS Markit Ltd. (NASDAQ:INFO) and Gol Linhas Aereas Inteligentes S.A. (NYSE:GOL).
EPS & Surprise Factor
IHS Markit Ltd. (NASDAQ:INFO) reported $0.58/share EPS for the previous quarter where analysts were predicting an EPS to be $0.55/share Thus beating the analyst Estimates with a Surprise Factor of 5.5 Percent. While, Gol Linhas Aereas Inteligentes S.A. (NYSE:GOL) reported EPS of $-1.05/share in the last quarter. The analysts projected EPS of $-0.36/share depicting a Surprise of -191.7 Percent.
Taking a look at Earnings per Share, IHS Markit Ltd. tends to be beating the analyst estimates more than Gol Linhas Aereas Inteligentes S.A.. so INFO is more profitable than GOL.
Technical Analysis of IHS Markit Ltd. & Gol Linhas Aereas Inteligentes S.A.
Moving average convergence divergence (MACD) shows that IHS Markit Ltd. (NASDAQ:INFO) is on a PRICE RELATIVITY trend While Gol Linhas Aereas Inteligentes S.A. (NYSE:GOL) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the IHS Markit Ltd. was in BEARISH territory and Gol Linhas Aereas Inteligentes S.A. was in BULLISH territory.
INFO’s current statistics gauge that the stock candle is BULLISH with MEDIUM volatility. While GOL’s candle is BULLISH with HIGH.
EPS Growth Rate: INFO’s 12.18% versus GOL’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 IHS Markit Ltd. (NASDAQ:INFO) is predicted at 12.18% while Gol Linhas Aereas Inteligentes S.A. (NYSE:GOL) stands at 0%. These numbers suggest that INFO 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 INFO stands at 0.4 while GOL is at 0.5 whereas the debt ratio of the prior is 0.77 while the debt ratio of the later is 0.
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 2.2 for INFO and 2.2 for GOL which means INFO has Hold rating whereas GOL 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 INFO is $58.53 which is 9.24% of its current price while GOL has price target of 11.08 which is 28.43% 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.
INFO currently has price to earning P/E ratio of 50.4 whereas GOL has 0 while the forward P/E ratio for the prior stands at 20.55 and for the later it depicts the value of 13.77.
The price to Book P/B for INFO is 2.65, Price to Sale is at 5.39 and for GOL these ratios stand at 0 and 0.36.