The shares of Xilinx, Inc. (NASDAQ:XLNX) and Lamb Weston Holdings, Inc. (NYSE:LW) were among the active stocks of the last trading sessions. Xilinx, Inc. (NASDAQ:XLNX) soared to 0.23% closing at the price of $77.65 whereas the shares of Lamb Weston Holdings, Inc. (NYSE:LW) soared 0.85% with the increase of 0.63 points closing at the price of $74.62. Xilinx, Inc. has currently increase 14.17% in its stock over the period of 6-months while its rival Lamb Weston Holdings, Inc. added 17.03% 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 Xilinx, Inc. (NASDAQ:XLNX) is 18.2% while the ROI of Lamb Weston Holdings, Inc. (NYSE:LW) is 18.8%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, XLNX’s EBITDA Margin is 19.46 whereas LW’s is 17.79.
Both the profitability ratios suggest a mixed sentiment for Xilinx, Inc. (NASDAQ:XLNX) and Lamb Weston Holdings, Inc. (NYSE:LW).
EPS & Surprise Factor
Xilinx, Inc. (NASDAQ:XLNX) reported $0.74/share EPS for the previous quarter where analysts were predicting an EPS to be $0.73/share Thus beating the analyst Estimates with a Surprise Factor of 1.4 Percent. While, Lamb Weston Holdings, Inc. (NYSE:LW) reported EPS of $0.73/share in the last quarter. The analysts projected EPS of $0.68/share depicting a Surprise of 7.4 Percent.
Taking a look at Earnings per Share, Lamb Weston Holdings, Inc. tends to be beating the analyst estimates more than Xilinx, Inc.. so LW is more profitable than XLNX.
Technical Analysis of Xilinx, Inc. & Lamb Weston Holdings, Inc.
Moving average convergence divergence (MACD) shows that Xilinx, Inc. (NASDAQ:XLNX) is on a PRICE RELATIVITY trend While Lamb Weston Holdings, Inc. (NYSE:LW) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the Xilinx, Inc. was in BEARISH territory and Lamb Weston Holdings, Inc. was in BULLISH territory.
XLNX’s current statistics gauge that the stock candle is BULLISH with HIGH volatility. While LW’s candle is BULLISH with HIGH.
EPS Growth Rate: XLNX’s 15.85% versus LW’s 8.95%
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 Xilinx, Inc. (NASDAQ:XLNX) is predicted at 15.85% while Lamb Weston Holdings, Inc. (NYSE:LW) stands at 8.95%. These numbers suggest that XLNX 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 XLNX stands at 4.4 while LW is at 1.9 whereas the debt ratio of the prior is 0.74 while the debt ratio of the later is 0.
The values of the both ratios suggest that XLNX 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 2.4 for XLNX and 2.1 for LW which means XLNX has Hold rating whereas LW 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 XLNX is $82.29 which is 5.64% of its current price while LW has price target of 74.21 which is -0.55% 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.
XLNX currently has price to earning P/E ratio of 25.93 whereas LW has 30.06 while the forward P/E ratio for the prior stands at 23.61 and for the later it depicts the value of 22.83.
The price to Book P/B for XLNX is 8.46, Price to Sale is at 7.95 and for LW these ratios stand at 0 and 3.1.