Which Stock will you hold for a while? AMC Networks Inc. (AMCX) or Companhia de saneamento Basico Do Estado De Sao Paulo – Sabesp (SBS)

0

The shares of AMC Networks Inc. (NASDAQ:AMCX) and Companhia de saneamento Basico Do Estado De Sao Paulo – Sabesp (NYSE:SBS) were among the active stocks of the last trading sessions. AMC Networks Inc. (NASDAQ:AMCX) declined to -7.1% closing at the price of $59.96 whereas the shares of Companhia de saneamento Basico Do Estado De Sao Paulo – Sabesp (NYSE:SBS) soared 3.35% with the increase of 0.25 points closing at the price of $7.71. AMC Networks Inc. has currently increase 16.52% in its stock over the period of 6-months while its rival Companhia de saneamento Basico Do Estado De Sao Paulo – Sabesp subtracted -20.66% 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 AMC Networks Inc. (NASDAQ:AMCX) is 15.3% while the ROI of Companhia de saneamento Basico Do Estado De Sao Paulo – Sabesp (NYSE:SBS) is 10.1%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, AMCX’s EBITDA Margin is 7.3 whereas SBS’s is 5.05.

Both the profitability ratios suggest that AMC Networks Inc. (NASDAQ:AMCX) is more suitable investment in terms of profitability and return.

EPS & Surprise Factor

AMC Networks Inc. (NASDAQ:AMCX) reported $1.93/share EPS for the previous quarter where analysts were predicting an EPS to be $1.98/share Thus lagging the analyst Estimates with a Surprise Factor of -2.5 Percent. While, Companhia de saneamento Basico Do Estado De Sao Paulo – Sabesp (NYSE:SBS) reported EPS of $0.07/share in the last quarter. The analysts projected EPS of $0.1/share depicting a Surprise of -30 Percent.

Taking a look at Earnings per Share, AMC Networks Inc. tends to be beating the analyst estimates more than Companhia de saneamento Basico Do Estado De Sao Paulo – Sabesp. so AMCX is more profitable than SBS.

Technical Analysis of AMC Networks Inc. & Companhia de saneamento Basico Do Estado De Sao Paulo – Sabesp

Moving average convergence divergence (MACD) shows that AMC Networks Inc. (NASDAQ:AMCX) is on a PRICE RELATIVITY trend While Companhia de saneamento Basico Do Estado De Sao Paulo – Sabesp (NYSE:SBS) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the AMC Networks Inc. was in BEARISH territory and Companhia de saneamento Basico Do Estado De Sao Paulo – Sabesp was in BULLISH territory.

AMCX’s current statistics gauge that the stock candle is BEARISH with HIGH volatility. While SBS’s candle is BULLISH with HIGH.

EPS Growth Rate: AMCX’s 5.53% versus SBS’s 10.71%

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 AMC Networks Inc. (NASDAQ:AMCX) is predicted at 5.53% while Companhia de saneamento Basico Do Estado De Sao Paulo – Sabesp (NYSE:SBS) stands at 10.71%. These numbers suggest that SBS 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 AMCX stands at 2.5 while SBS is at 1.2 whereas the debt ratio of the prior is 18.88 while the debt ratio of the later is 0.72.

The values of the both ratios suggest that AMCX is more suitable investment when the liquidity and risk is the main concern.

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 3 for AMCX and 2.7 for SBS which means AMCX has Hold rating whereas SBS 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 AMCX is $61.28 which is 2.15% of its current price while SBS has price target of 8.39 which is 8.1% 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.

AMCX currently has price to earning P/E ratio of 8.32 whereas SBS has 8.98 while the forward P/E ratio for the prior stands at 6.8 and for the later it depicts the value of 1.76.

The price to Book P/B for AMCX is 20.89, Price to Sale is at 1.19 and for SBS these ratios stand at 1.12 and 1.34.