Comparing Profitability of these two stocks: Viking Therapeutics, Inc. (VKTX), Anadarko Petroleum Corporation (APC)

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The shares of Viking Therapeutics, Inc. (NASDAQ:VKTX) and Anadarko Petroleum Corporation (NYSE:APC) were among the active stocks of the last trading sessions. Viking Therapeutics, Inc. (NASDAQ:VKTX) soared to 2.21% closing at the price of $13.87 whereas the shares of Anadarko Petroleum Corporation (NYSE:APC) declined -2.53% with the decrease of -1.72 points closing at the price of $66.28. Viking Therapeutics, Inc. has currently increase 176.29% in its stock over the period of 6-months while its rival Anadarko Petroleum Corporation added 5.16% 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 Viking Therapeutics, Inc. (NASDAQ:VKTX) is 0% while the ROI of Anadarko Petroleum Corporation (NYSE:APC) is -1.4%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, VKTX’s EBITDA Margin is NOT AVAILABLE whereas APC’s is 11.09.

Both the profitability ratios suggest that Viking Therapeutics, Inc. (NASDAQ:VKTX) is more suitable investment in terms of profitability and return.

EPS & Surprise Factor

Viking Therapeutics, Inc. (NASDAQ:VKTX) reported $-0.13/share EPS for the previous quarter where analysts were predicting an EPS to be $-0.11/share Thus lagging the analyst Estimates with a Surprise Factor of -18.2 Percent. While, Anadarko Petroleum Corporation (NYSE:APC) reported EPS of $0.54/share in the last quarter. The analysts projected EPS of $0.56/share depicting a Surprise of -3.6 Percent.

Taking a look at Earnings per Share, Anadarko Petroleum Corporation tends to be beating the analyst estimates more than Viking Therapeutics, Inc.. so APC is more profitable than VKTX.

Technical Analysis of Viking Therapeutics, Inc. & Anadarko Petroleum Corporation

Moving average convergence divergence (MACD) shows that Viking Therapeutics, Inc. (NASDAQ:VKTX) is on a PRICE RELATIVITY trend While Anadarko Petroleum Corporation (NYSE:APC) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the Viking Therapeutics, Inc. was in BEARISH territory and Anadarko Petroleum Corporation was in BEARISH territory.

VKTX’s current statistics gauge that the stock candle is BULLISH with MEDIUM volatility. While APC’s candle is BEARISH with MEDIUM.

EPS Growth Rate: VKTX’s 40% versus APC’s 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 Viking Therapeutics, Inc. (NASDAQ:VKTX) is predicted at 40% while Anadarko Petroleum Corporation (NYSE:APC) stands at 12%. These numbers suggest that VKTX 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 VKTX stands at 35.1 while APC is at 0.9 whereas the debt ratio of the prior is 0 while the debt ratio of the later is 1.83.

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 1.9 for VKTX and 1.9 for APC which means VKTX has Buy rating whereas APC 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 VKTX is $32.33 which is 57.1% of its current price while APC has price target of 85.5 which is 22.48% 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.

VKTX currently has price to earning P/E ratio of 0 whereas APC has 0 while the forward P/E ratio for the prior stands at 0 and for the later it depicts the value of 16.75.

The price to Book P/B for VKTX is 5.21, Price to Sale is at 0 and for APC these ratios stand at 3.75 and 2.86.