Which Stock will give you a Nice Return? Cosan Limited (CZZ) or Avis Budget Group, Inc. (CAR)

The shares of Cosan Limited (NYSE:CZZ) and Avis Budget Group, Inc. (NASDAQ:CAR) were among the active stocks of the last trading sessions. Cosan Limited (NYSE:CZZ) soared to 1.3% closing at the price of $7.77 whereas the shares of Avis Budget Group, Inc. (NASDAQ:CAR) declined -5.96% with the decrease of -2.02 points closing at the price of $31.9. Cosan Limited has currently decrease -27.92% in its stock over the period of 6-months while its rival Avis Budget Group, Inc. subtracted -33.97% 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 Cosan Limited (NYSE:CZZ) is 11.5% while the ROI of Avis Budget Group, Inc. (NASDAQ:CAR) is 4.9%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, CZZ’s EBITDA Margin is 7.1 whereas CAR’s is 18.3.

Both the profitability ratios suggest a mixed sentiment for Cosan Limited (NYSE:CZZ) and Avis Budget Group, Inc. (NASDAQ:CAR).

EPS & Surprise Factor
Technical Analysis of Cosan Limited & Avis Budget Group, Inc.

Moving average convergence divergence (MACD) shows that Cosan Limited (NYSE:CZZ) is on a PRICE RELATIVITY trend While Avis Budget Group, Inc. (NASDAQ:CAR) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the Cosan Limited was in BULLISH territory and Avis Budget Group, Inc. was in BULLISH territory.

CZZ’s current statistics gauge that the stock candle is BULLISH with HIGH volatility. While CAR’s candle is BEARISH with LOW.

EPS Growth Rate: CZZ’s 11.2% versus CAR’s 15.3%

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 Cosan Limited (NYSE:CZZ) is predicted at 11.2% while Avis Budget Group, Inc. (NASDAQ:CAR) stands at 15.3%. These numbers suggest that CAR 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 CZZ stands at 1.6 while CAR is at 1.2 whereas the debt ratio of the prior is 4.8 while the debt ratio of the later is 41.25.

The values of the both ratios suggest that one is more liquid and other investment is more risk free.

Analyst Recommendations

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 CZZ and 2.3 for CAR which means CZZ has Hold rating whereas CAR 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 CZZ is $11.43 which is 32.02% of its current price while CAR has price target of 46 which is 30.65% of its current price.

Valuation Ratios

Valuation is the process of determining the company’s worth for an investor, the valuation ratios give an insight to that worthiness.

CZZ currently has price to earning P/E ratio of 11.26 whereas CAR has 14.2 while the forward P/E ratio for the prior stands at 7.98 and for the later it depicts the value of 8.22.

The price to Book P/B for CZZ is 1.29, Price to Sale is at 0.49 and for CAR these ratios stand at 6.92 and 0.28.