The shares of WPX Energy, Inc. (NYSE:WPX) and Fastenal Company (NASDAQ:FAST) were among the active stocks of the last trading sessions. WPX Energy, Inc. (NYSE:WPX) declined to -4.32% closing at the price of $18.17 whereas the shares of Fastenal Company (NASDAQ:FAST) declined -0.81% with the decrease of -0.42 points closing at the price of $51.25. WPX Energy, Inc. has currently increase 19.23% in its stock over the period of 6-months while its rival Fastenal Company added 2.34% 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 WPX Energy, Inc. (NYSE:WPX) is 1.3% while the ROI of Fastenal Company (NASDAQ:FAST) is 22.4%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, WPX’s EBITDA Margin is 22.35 whereas FAST’s is 15.46.
Both the profitability ratios suggest a mixed sentiment for WPX Energy, Inc. (NYSE:WPX) and Fastenal Company (NASDAQ:FAST).
EPS & Surprise Factor
WPX Energy, Inc. (NYSE:WPX) reported $0.06/share EPS for the previous quarter where analysts were predicting an EPS to be $0.03/share Thus beating the analyst Estimates with a Surprise Factor of 100 Percent. While, Fastenal Company (NASDAQ:FAST) reported EPS of $0.69/share in the last quarter. The analysts projected EPS of $0.67/share depicting a Surprise of 3 Percent.
Taking a look at Earnings per Share, WPX Energy, Inc. tends to be beating the analyst estimates more than Fastenal Company. so WPX is more profitable than FAST.
Technical Analysis of WPX Energy, Inc. & Fastenal Company
Moving average convergence divergence (MACD) shows that WPX Energy, Inc. (NYSE:WPX) is on a PRICE RELATIVITY trend While Fastenal Company (NASDAQ:FAST) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the WPX Energy, Inc. was in BEARISH territory and Fastenal Company was in BEARISH territory.
WPX’s current statistics gauge that the stock candle is BEARISH with HIGH volatility. While FAST’s candle is BEARISH with HIGH.
EPS Growth Rate: WPX’s 0% versus FAST’s 19%
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 WPX Energy, Inc. (NYSE:WPX) is predicted at 0% while Fastenal Company (NASDAQ:FAST) stands at 19%. These numbers suggest that FAST 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 WPX stands at 0.6 while FAST is at 5.6 whereas the debt ratio of the prior is 0 while the debt ratio of the later is 0.19.
The values of the both ratios suggest that FAST 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 1.7 for WPX and 2.5 for FAST which means WPX has Buy rating whereas FAST 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 WPX is $25.9 which is 29.85% of its current price while FAST has price target of 58.92 which is 13.02% 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.
WPX currently has price to earning P/E ratio of 0 whereas FAST has 22.39 while the forward P/E ratio for the prior stands at 20.44 and for the later it depicts the value of 18.23.
The price to Book P/B for WPX is 1.96, Price to Sale is at 5.99 and for FAST these ratios stand at 6.61 and 3.16.