The shares of AK Steel Holding Corporation (NYSE:AKS) and Corning Incorporated (NYSE:GLW) were among the active stocks of the last trading sessions. AK Steel Holding Corporation (NYSE:AKS) declined to -4.79% closing at the price of $4.57 whereas the shares of Corning Incorporated (NYSE:GLW) declined -5.64% with the decrease of -1.93 points closing at the price of $32.32. AK Steel Holding Corporation has currently increase 1.78% in its stock over the period of 6-months while its rival Corning Incorporated added 17.23% 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 AK Steel Holding Corporation (NYSE:AKS) is 13% while the ROI of Corning Incorporated (NYSE:GLW) is -2.4%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, AKS’s EBITDA Margin is 8.8 whereas GLW’s is 11.98.
Both the profitability ratios suggest a mixed sentiment for AK Steel Holding Corporation (NYSE:AKS) and Corning Incorporated (NYSE:GLW).
EPS & Surprise Factor
AK Steel Holding Corporation (NYSE:AKS) reported $0.18/share EPS for the previous quarter where analysts were predicting an EPS to be $0.2/share Thus lagging the analyst Estimates with a Surprise Factor of -10 Percent. While, Corning Incorporated (NYSE:GLW) reported EPS of $0.38/share in the last quarter. The analysts projected EPS of $0.37/share depicting a Surprise of 2.7 Percent.
Taking a look at Earnings per Share, Corning Incorporated tends to be beating the analyst estimates more than AK Steel Holding Corporation. so GLW is more profitable than AKS.
Technical Analysis of AK Steel Holding Corporation & Corning Incorporated
Moving average convergence divergence (MACD) shows that AK Steel Holding Corporation (NYSE:AKS) is on a PRICE RELATIVITY trend While Corning Incorporated (NYSE:GLW) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the AK Steel Holding Corporation was in BEARISH territory and Corning Incorporated was in BEARISH territory.
AKS’s current statistics gauge that the stock candle is BEARISH with MEDIUM volatility. While GLW’s candle is BEARISH with HIGH.
EPS Growth Rate: AKS’s 18.57% versus GLW’s 9.81%
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 AK Steel Holding Corporation (NYSE:AKS) is predicted at 18.57% while Corning Incorporated (NYSE:GLW) stands at 9.81%. These numbers suggest that AKS 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 AKS stands at 2 while GLW is at 2.2 whereas the debt ratio of the prior is 0 while the debt ratio of the later is 0.46.
The values of the both ratios suggest that GLW 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 2.6 for AKS and 2.1 for GLW which means AKS has Hold rating whereas GLW 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 AKS is $5.25 which is 12.95% of its current price while GLW has price target of 36.93 which is 12.48% 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.
AKS currently has price to earning P/E ratio of 0 whereas GLW has 0 while the forward P/E ratio for the prior stands at 5.06 and for the later it depicts the value of 15.82.
The price to Book P/B for AKS is 50.78, Price to Sale is at 0.23 and for GLW these ratios stand at 2.29 and 2.57.