The shares of Activision Blizzard, Inc (NASDAQ:ATVI) and India Globalization Capital Inc. (NYSE:IGC) were among the active stocks of the last trading sessions. Activision Blizzard, Inc (NASDAQ:ATVI) soared to 0.37% closing at the price of $73.85 whereas the shares of India Globalization Capital Inc. (NYSE:IGC) declined -12.75% with the decrease of -0.65 points closing at the price of $4.45. Activision Blizzard, Inc has currently increase 12.1% in its stock over the period of 6-months while its rival India Globalization Capital Inc. added 629.99% 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 Activision Blizzard, Inc (NASDAQ:ATVI) is 7.6% while the ROI of India Globalization Capital Inc. (NYSE:IGC) is -17.4%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, ATVI’s EBITDA Margin is 26.81 whereas IGC’s is -67.45.
Both the profitability ratios suggest that Activision Blizzard, Inc (NASDAQ:ATVI) is more suitable investment in terms of profitability and return.
EPS & Surprise Factor
Technical Analysis of Activision Blizzard, Inc & India Globalization Capital Inc.
Moving average convergence divergence (MACD) shows that Activision Blizzard, Inc (NASDAQ:ATVI) is on a PRICE RELATIVITY trend While India Globalization Capital Inc. (NYSE:IGC) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the Activision Blizzard, Inc was in BEARISH territory and India Globalization Capital Inc. was in BEARISH territory.
ATVI’s current statistics gauge that the stock candle is NEUTRAL with HIGH volatility. While IGC’s candle is BEARISH with HIGH.
EPS Growth Rate: ATVI’s 14.9% versus IGC’s 0%
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 Activision Blizzard, Inc (NASDAQ:ATVI) is predicted at 14.9% while India Globalization Capital Inc. (NYSE:IGC) stands at 0%. These numbers suggest that ATVI 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 ATVI stands at 3 while IGC is at 1.1 whereas the debt ratio of the prior is 0 while the debt ratio of the later is 0.26.
The values of the both ratios suggest that one is more liquid and other investment is more risk free.
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 for ATVI and 0 for IGC which means ATVI has Buy rating whereas IGC has Strong Buy rating.
Valuation is the process of determining the company’s worth for an investor, the valuation ratios give an insight to that worthiness.
ATVI currently has price to earning P/E ratio of 49.73 whereas IGC has 0 while the forward P/E ratio for the prior stands at 24.27 and for the later it depicts the value of 0.
The price to Book P/B for ATVI is 5.43, Price to Sale is at 7.82 and for IGC these ratios stand at 18.54 and 65.28.