The shares of XPO Logistics, Inc. (NYSE:XPO) and Pentair plc. (NYSE:PNR) were among the active stocks of the last trading sessions. XPO Logistics, Inc. (NYSE:XPO) declined to -4.73% closing at the price of $95.84 whereas the shares of Pentair plc. (NYSE:PNR) declined -1.02% with the decrease of -0.4 points closing at the price of $38.77. XPO Logistics, Inc. has currently decrease -8.23% in its stock over the period of 6-months while its rival Pentair plc. subtracted -18.05% 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 XPO Logistics, Inc. (NYSE:XPO) is 6.4% while the ROI of Pentair plc. (NYSE:PNR) is 9.8%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, XPO’s EBITDA Margin is 12.5 whereas PNR’s is 7.45.
Both the profitability ratios suggest a mixed sentiment for XPO Logistics, Inc. (NYSE:XPO) and Pentair plc. (NYSE:PNR).
EPS & Surprise Factor
XPO Logistics, Inc. (NYSE:XPO) reported $0.98/share EPS for the previous quarter where analysts were predicting an EPS to be $0.98/share Thus meeting the analyst Estimates with a Surprise Factor of 0 Percent. While, Pentair plc. (NYSE:PNR) reported EPS of $0.71/share in the last quarter. The analysts projected EPS of $0.69/share depicting a Surprise of 2.9 Percent.
Taking a look at Earnings per Share, Pentair plc. tends to be beating the analyst estimates more than XPO Logistics, Inc.. so PNR is more profitable than XPO.
Technical Analysis of XPO Logistics, Inc. & Pentair plc.
Moving average convergence divergence (MACD) shows that XPO Logistics, Inc. (NYSE:XPO) is on a PRICE RELATIVITY trend While Pentair plc. (NYSE:PNR) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the XPO Logistics, Inc. was in BEARISH territory and Pentair plc. was in BEARISH territory.
XPO’s current statistics gauge that the stock candle is BEARISH with HIGH volatility. While PNR’s candle is BULLISH with HIGH.
EPS Growth Rate: XPO’s 39.91% versus PNR’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 XPO Logistics, Inc. (NYSE:XPO) is predicted at 39.91% while Pentair plc. (NYSE:PNR) stands at 0%. These numbers suggest that XPO 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 XPO stands at 1.3 while PNR is at 1.4 whereas the debt ratio of the prior is 1.22 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 1.9 for XPO and 2.9 for PNR which means XPO has Buy rating whereas PNR 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 XPO is $124.32 which is 22.91% of its current price while PNR has price target of 46 which is 15.72% 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.
XPO currently has price to earning P/E ratio of 45.99 whereas PNR has 13.34 while the forward P/E ratio for the prior stands at 21.96 and for the later it depicts the value of 15.43.
The price to Book P/B for XPO is 3.13, Price to Sale is at 0.73 and for PNR these ratios stand at 3.63 and 1.71.