The shares of Freeport-McMoran, Inc. (NYSE:FCX) and Snap Inc. (NYSE:SNAP) were among the active stocks of the last trading sessions. Freeport-McMoran, Inc. (NYSE:FCX) soared to 3.6% closing at the price of $13.23 whereas the shares of Snap Inc. (NYSE:SNAP) soared 3.34% with the increase of 0.22 points closing at the price of $6.81. Freeport-McMoran, Inc. has currently decrease -25.97% in its stock over the period of 6-months while its rival Snap Inc. subtracted -54.23% 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 Freeport-McMoran, Inc. (NYSE:FCX) is 11.3% while the ROI of Snap Inc. (NYSE:SNAP) is -102.1%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, FCX’s EBITDA Margin is 3.9 whereas SNAP’s is -5.78.
Both the profitability ratios suggest that Freeport-McMoran, Inc. (NYSE:FCX) is more suitable investment in terms of profitability and return.
EPS & Surprise Factor
Freeport-McMoran, Inc. (NYSE:FCX) reported $0.58/share EPS for the previous quarter where analysts were predicting an EPS to be $0.52/share Thus beating the analyst Estimates with a Surprise Factor of 11.5 Percent. While, Snap Inc. (NYSE:SNAP) reported EPS of $-0.14/share in the last quarter. The analysts projected EPS of $-0.17/share depicting a Surprise of 17.6 Percent.
Taking a look at Earnings per Share, Snap Inc. tends to be beating the analyst estimates more than Freeport-McMoran, Inc.. so SNAP is more profitable than FCX.
Technical Analysis of Freeport-McMoran, Inc. & Snap Inc.
Moving average convergence divergence (MACD) shows that Freeport-McMoran, Inc. (NYSE:FCX) is on a PRICE RELATIVITY trend While Snap Inc. (NYSE:SNAP) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the Freeport-McMoran, Inc. was in BEARISH territory and Snap Inc. was in BEARISH territory.
FCX’s current statistics gauge that the stock candle is BULLISH with HIGH volatility. While SNAP’s candle is BULLISH with HIGH.
EPS Growth Rate: FCX’s 6.2% versus SNAP’s 34.7%
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 Freeport-McMoran, Inc. (NYSE:FCX) is predicted at 6.2% while Snap Inc. (NYSE:SNAP) stands at 34.7%. These numbers suggest that SNAP 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 FCX stands at 2.7 while SNAP is at 6.7 whereas the debt ratio of the prior is 1.17 while the debt ratio of the later is 0.
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 2.7 for FCX and 3.1 for SNAP which means FCX has Hold rating whereas SNAP has Sell 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 FCX is $18.29 which is 27.67% of its current price while SNAP has price target of 11.24 which is 39.41% 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.
FCX currently has price to earning P/E ratio of 7.78 whereas SNAP has 0 while the forward P/E ratio for the prior stands at 13.35 and for the later it depicts the value of 0.
The price to Book P/B for FCX is 2.02, Price to Sale is at 1.02 and for SNAP these ratios stand at 3.4 and 8.85.