The shares of Crown Holdings, Inc. (NYSE:CCK) and Lam Research Corporation (NASDAQ:LRCX) were among the active stocks of the last trading sessions. Crown Holdings, Inc. (NYSE:CCK) declined to -2.3% closing at the price of $48.76 whereas the shares of Lam Research Corporation (NASDAQ:LRCX) declined -1.1% with the decrease of -1.61 points closing at the price of $144.47. Crown Holdings, Inc. has currently decrease -5.41% in its stock over the period of 6-months while its rival Lam Research Corporation subtracted -28.07% 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 Crown Holdings, Inc. (NYSE:CCK) is 14.4% while the ROI of Lam Research Corporation (NASDAQ:LRCX) is 33.3%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, CCK’s EBITDA Margin is 10.73 whereas LRCX’s is 5.87.
Both the profitability ratios suggest a mixed sentiment for Crown Holdings, Inc. (NYSE:CCK) and Lam Research Corporation (NASDAQ:LRCX).
EPS & Surprise Factor
Crown Holdings, Inc. (NYSE:CCK) reported $1.55/share EPS for the previous quarter where analysts were predicting an EPS to be $1.56/share Thus lagging the analyst Estimates with a Surprise Factor of -0.6 Percent. While, Lam Research Corporation (NASDAQ:LRCX) reported EPS of $5.31/share in the last quarter. The analysts projected EPS of $4.94/share depicting a Surprise of 7.5 Percent.
Taking a look at Earnings per Share, Lam Research Corporation tends to be beating the analyst estimates more than Crown Holdings, Inc.. so LRCX is more profitable than CCK.
Technical Analysis of Crown Holdings, Inc. & Lam Research Corporation
Moving average convergence divergence (MACD) shows that Crown Holdings, Inc. (NYSE:CCK) is on a PRICE RELATIVITY trend While Lam Research Corporation (NASDAQ:LRCX) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the Crown Holdings, Inc. was in BULLISH territory and Lam Research Corporation was in BEARISH territory.
CCK’s current statistics gauge that the stock candle is BEARISH with MEDIUM volatility. While LRCX’s candle is BEARISH with HIGH.
EPS Growth Rate: CCK’s 15.06% versus LRCX’s 13.12%
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 Crown Holdings, Inc. (NYSE:CCK) is predicted at 15.06% while Lam Research Corporation (NASDAQ:LRCX) stands at 13.12%. These numbers suggest that CCK 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 CCK stands at 1.2 while LRCX is at 2.9 whereas the debt ratio of the prior is 11.93 while the debt ratio of the later is 0.38.
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 CCK and 2.1 for LRCX which means CCK has Hold rating whereas LRCX 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 CCK is $57.64 which is 15.41% of its current price while LRCX has price target of 222.53 which is 35.08% 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.
CCK currently has price to earning P/E ratio of 13.11 whereas LRCX has 8.47 while the forward P/E ratio for the prior stands at 8.36 and for the later it depicts the value of 8.21.
The price to Book P/B for CCK is 8.31, Price to Sale is at 0.67 and for LRCX these ratios stand at 3.58 and 2.