The shares of Fiat Chrysler Automobiles N.V. (NYSE:FCAU) and STARWOOD PROPERTY TRUST, INC. (NYSE:STWD) were among the active stocks of the last trading sessions. Fiat Chrysler Automobiles N.V. (NYSE:FCAU) soared to 0.43% closing at the price of $16.17 whereas the shares of STARWOOD PROPERTY TRUST, INC. (NYSE:STWD) soared 1.1% with the increase of 0.23 points closing at the price of $21.16. Fiat Chrysler Automobiles N.V. has currently decrease -30.93% in its stock over the period of 6-months while its rival STARWOOD PROPERTY TRUST, INC. added 1.73% 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 Fiat Chrysler Automobiles N.V. (NYSE:FCAU) is 0% while the ROI of STARWOOD PROPERTY TRUST, INC. (NYSE:STWD) is 0.9%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, FCAU’s EBITDA Margin is 2.27 whereas STWD’s is NOT AVAILABLE.
Both the profitability ratios suggest that STARWOOD PROPERTY TRUST, INC. (NYSE:STWD) is more suitable investment in terms of profitability and return.
EPS & Surprise Factor
Fiat Chrysler Automobiles N.V. (NYSE:FCAU) reported $0.71/share EPS for the previous quarter where analysts were predicting an EPS to be $1.01/share Thus lagging the analyst Estimates with a Surprise Factor of -29.7 Percent. While, STARWOOD PROPERTY TRUST, INC. (NYSE:STWD) reported EPS of $0.54/share in the last quarter. The analysts projected EPS of $0.53/share depicting a Surprise of 1.9 Percent.
Taking a look at Earnings per Share, STARWOOD PROPERTY TRUST, INC. tends to be beating the analyst estimates more than Fiat Chrysler Automobiles N.V.. so STWD is more profitable than FCAU.
Technical Analysis of Fiat Chrysler Automobiles N.V. & STARWOOD PROPERTY TRUST, INC.
Moving average convergence divergence (MACD) shows that Fiat Chrysler Automobiles N.V. (NYSE:FCAU) is on a PRICE RELATIVITY trend While STARWOOD PROPERTY TRUST, INC. (NYSE:STWD) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the Fiat Chrysler Automobiles N.V. was in BEARISH territory and STARWOOD PROPERTY TRUST, INC. was in BEARISH territory.
FCAU’s current statistics gauge that the stock candle is BEARISH with HIGH volatility. While STWD’s candle is BEARISH with MEDIUM.
EPS Growth Rate: FCAU’s 20.11% versus STWD’s 2.23%
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 Fiat Chrysler Automobiles N.V. (NYSE:FCAU) is predicted at 20.11% while STARWOOD PROPERTY TRUST, INC. (NYSE:STWD) stands at 2.23%. These numbers suggest that FCAU 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 FCAU stands at 0 while STWD is at 0 whereas the debt ratio of the prior is 0 while the debt ratio of the later is 1.92.
The values of the both ratios suggest that STWD 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 2.5 for FCAU and 2 for STWD which means FCAU has Hold rating whereas STWD has Buy 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 FCAU is $25.78 which is 37.28% of its current price while STWD has price target of 23.83 which is 11.2% 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.
FCAU currently has price to earning P/E ratio of 6.25 whereas STWD has 14.32 while the forward P/E ratio for the prior stands at 4.14 and for the later it depicts the value of 9.48.
The price to Book P/B for FCAU is 0.96, Price to Sale is at 0.19 and for STWD these ratios stand at 1.24 and 5.7.