The shares of Cerner Corporation (NASDAQ:CERN) and Alamos Gold Inc. (NYSE:AGI) were among the active stocks of the last trading sessions. Cerner Corporation (NASDAQ:CERN) declined to -2.16% closing at the price of $61.6 whereas the shares of Alamos Gold Inc. (NYSE:AGI) soared 9.33% with the increase of 0.43 points closing at the price of $5.04. Cerner Corporation has currently increase 8.24% in its stock over the period of 6-months while its rival Alamos Gold Inc. subtracted -11.89% 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 Cerner Corporation (NASDAQ:CERN) is 13.4% while the ROI of Alamos Gold Inc. (NYSE:AGI) is 0%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, CERN’s EBITDA Margin is 15.89 whereas AGI’s is 7.11.
Both the profitability ratios suggest that Cerner Corporation (NASDAQ:CERN) is more suitable investment in terms of profitability and return.
EPS & Surprise Factor
Cerner Corporation (NASDAQ:CERN) reported $0.62/share EPS for the previous quarter where analysts were predicting an EPS to be $0.6/share Thus beating the analyst Estimates with a Surprise Factor of 3.3 Percent. While, Alamos Gold Inc. (NYSE:AGI) reported EPS of $0.06/share in the last quarter. The analysts projected EPS of $0.03/share depicting a Surprise of 100 Percent.
Taking a look at Earnings per Share, Alamos Gold Inc. tends to be beating the analyst estimates more than Cerner Corporation. so AGI is more profitable than CERN.
Technical Analysis of Cerner Corporation & Alamos Gold Inc.
Moving average convergence divergence (MACD) shows that Cerner Corporation (NASDAQ:CERN) is on a PRICE RELATIVITY trend While Alamos Gold Inc. (NYSE:AGI) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the Cerner Corporation was in BEARISH territory and Alamos Gold Inc. was in BULLISH territory.
CERN’s current statistics gauge that the stock candle is BEARISH with HIGH volatility. While AGI’s candle is BULLISH with MEDIUM.
EPS Growth Rate: CERN’s 11.57% versus AGI’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 Cerner Corporation (NASDAQ:CERN) is predicted at 11.57% while Alamos Gold Inc. (NYSE:AGI) stands at 0%. These numbers suggest that CERN 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 CERN stands at 2.8 while AGI is at 0 whereas the debt ratio of the prior is 0.09 while the debt ratio of the later is 0.
The values of the both ratios suggest that CERN 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 2.3 for CERN and 2.2 for AGI which means CERN has Hold rating whereas AGI 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 CERN is $68.25 which is 9.74% of its current price while AGI has price target of 8.82 which is 42.86% 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.
CERN currently has price to earning P/E ratio of 29.74 whereas AGI has 112 while the forward P/E ratio for the prior stands at 22.06 and for the later it depicts the value of 16.26.
The price to Book P/B for CERN is 4.17, Price to Sale is at 3.86 and for AGI these ratios stand at 0.74 and 3.11.