The shares of HollyFrontier Corporation (NYSE:HFC) and Skechers U.S.A., Inc. (NYSE:SKX) were among the active stocks of the last trading sessions. HollyFrontier Corporation (NYSE:HFC) soared to 0.24% closing at the price of $66.04 whereas the shares of Skechers U.S.A., Inc. (NYSE:SKX) soared 0.76% with the increase of 0.19 points closing at the price of $25.19. HollyFrontier Corporation has currently increase 18.54% in its stock over the period of 6-months while its rival Skechers U.S.A., Inc. subtracted -40% 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 HollyFrontier Corporation (NYSE:HFC) is 8% while the ROI of Skechers U.S.A., Inc. (NYSE:SKX) is 17.5%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, HFC’s EBITDA Margin is 6.69 whereas SKX’s is 6.88.
Both the profitability ratios suggest that Skechers U.S.A., Inc. (NYSE:SKX) is more suitable investment in terms of profitability and return.
EPS & Surprise Factor
HollyFrontier Corporation (NYSE:HFC) reported $1.45/share EPS for the previous quarter where analysts were predicting an EPS to be $1.61/share Thus lagging the analyst Estimates with a Surprise Factor of -9.9 Percent. While, Skechers U.S.A., Inc. (NYSE:SKX) reported EPS of $0.29/share in the last quarter. The analysts projected EPS of $0.41/share depicting a Surprise of -29.3 Percent.
Taking a look at Earnings per Share, HollyFrontier Corporation tends to be beating the analyst estimates more than Skechers U.S.A., Inc.. so HFC is more profitable than SKX.
Technical Analysis of HollyFrontier Corporation & Skechers U.S.A., Inc.
Moving average convergence divergence (MACD) shows that HollyFrontier Corporation (NYSE:HFC) is on a PRICE RELATIVITY trend While Skechers U.S.A., Inc. (NYSE:SKX) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the HollyFrontier Corporation was in BEARISH territory and Skechers U.S.A., Inc. was in BEARISH territory.
HFC’s current statistics gauge that the stock candle is BULLISH with MEDIUM volatility. While SKX’s candle is BULLISH with HIGH.
EPS Growth Rate: HFC’s 48.27% versus SKX’s 18%
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 HollyFrontier Corporation (NYSE:HFC) is predicted at 48.27% while Skechers U.S.A., Inc. (NYSE:SKX) stands at 18%. These numbers suggest that HFC 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 HFC stands at 2.4 while SKX is at 3.3 whereas the debt ratio of the prior is 0.41 while the debt ratio of the later is 0.04.
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 3 for HFC and 2.4 for SKX which means HFC has Hold rating whereas SKX 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 HFC is $74.89 which is 11.82% of its current price while SKX has price target of 32 which is 21.28% 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.
HFC currently has price to earning P/E ratio of 10.74 whereas SKX has 14.1 while the forward P/E ratio for the prior stands at 9.08 and for the later it depicts the value of 12.86.
The price to Book P/B for HFC is 1.99, Price to Sale is at 0.72 and for SKX these ratios stand at 2 and 0.91.