The shares of United Continental Holdings, Inc. (NYSE:UAL) and Ball Corporation (NYSE:BLL) were among the active stocks of the last trading sessions. United Continental Holdings, Inc. (NYSE:UAL) declined to -2.69% closing at the price of $81.43 whereas the shares of Ball Corporation (NYSE:BLL) declined -1.36% with the decrease of -0.63 points closing at the price of $45.72. United Continental Holdings, Inc. has currently increase 25.53% in its stock over the period of 6-months while its rival Ball Corporation added 13.59% 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 United Continental Holdings, Inc. (NYSE:UAL) is 10.5% while the ROI of Ball Corporation (NYSE:BLL) is 6.6%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, UAL’s EBITDA Margin is 5.88 whereas BLL’s is 12.22.
Both the profitability ratios suggest a mixed sentiment for United Continental Holdings, Inc. (NYSE:UAL) and Ball Corporation (NYSE:BLL).
EPS & Surprise Factor
United Continental Holdings, Inc. (NYSE:UAL) reported $3.23/share EPS for the previous quarter where analysts were predicting an EPS to be $3.07/share Thus beating the analyst Estimates with a Surprise Factor of 5.2 Percent. While, Ball Corporation (NYSE:BLL) reported EPS of $0.58/share in the last quarter. The analysts projected EPS of $0.59/share depicting a Surprise of -1.7 Percent.
Taking a look at Earnings per Share, United Continental Holdings, Inc. tends to be beating the analyst estimates more than Ball Corporation. so UAL is more profitable than BLL.
Technical Analysis of United Continental Holdings, Inc. & Ball Corporation
Moving average convergence divergence (MACD) shows that United Continental Holdings, Inc. (NYSE:UAL) is on a PRICE RELATIVITY trend While Ball Corporation (NYSE:BLL) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the United Continental Holdings, Inc. was in BEARISH territory and Ball Corporation was in BULLISH territory.
UAL’s current statistics gauge that the stock candle is BEARISH with HIGH volatility. While BLL’s candle is BEARISH with HIGH.
EPS Growth Rate: UAL’s 18.71% versus BLL’s 10.65%
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 United Continental Holdings, Inc. (NYSE:UAL) is predicted at 18.71% while Ball Corporation (NYSE:BLL) stands at 10.65%. These numbers suggest that UAL 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 UAL stands at 0.6 while BLL is at 1.2 whereas the debt ratio of the prior is 1.68 while the debt ratio of the later is 1.89.
The values of the both ratios suggest that BLL 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 2.3 for UAL and 1.9 for BLL which means UAL has Hold rating whereas BLL 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 UAL is $95.46 which is 14.7% of its current price while BLL has price target of 47.54 which is 3.83% 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.
UAL currently has price to earning P/E ratio of 12.63 whereas BLL has 30.38 while the forward P/E ratio for the prior stands at 8.39 and for the later it depicts the value of 16.85.
The price to Book P/B for UAL is 2.59, Price to Sale is at 0.58 and for BLL these ratios stand at 4.09 and 1.36.