The shares of Pretium Resources, Inc. (NYSE:PVG) and American Electric Power Company, Inc. (NYSE:AEP) were among the active stocks of the last trading sessions. Pretium Resources, Inc. (NYSE:PVG) declined to -3.93% closing at the price of $8.07 whereas the shares of American Electric Power Company, Inc. (NYSE:AEP) declined -0.06% with the decrease of -0.04 points closing at the price of $71.68. Pretium Resources, Inc. has currently increase 11.46% in its stock over the period of 6-months while its rival American Electric Power Company, Inc. added 4.7% 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 Pretium Resources, Inc. (NYSE:PVG) is 0% while the ROI of American Electric Power Company, Inc. (NYSE:AEP) is 6.3%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, PVG’s EBITDA Margin is 12.27 whereas AEP’s is 11.32.
Both the profitability ratios suggest a mixed sentiment for Pretium Resources, Inc. (NYSE:PVG) and American Electric Power Company, Inc. (NYSE:AEP).
EPS & Surprise Factor
Pretium Resources, Inc. (NYSE:PVG) reported $0.05/share EPS for the previous quarter where analysts were predicting an EPS to be $0.08/share Thus lagging the analyst Estimates with a Surprise Factor of -37.5 Percent. While, American Electric Power Company, Inc. (NYSE:AEP) reported EPS of $1.01/share in the last quarter. The analysts projected EPS of $0.88/share depicting a Surprise of 14.8 Percent.
Taking a look at Earnings per Share, American Electric Power Company, Inc. tends to be beating the analyst estimates more than Pretium Resources, Inc.. so AEP is more profitable than PVG.
Technical Analysis of Pretium Resources, Inc. & American Electric Power Company, Inc.
Moving average convergence divergence (MACD) shows that Pretium Resources, Inc. (NYSE:PVG) is on a PRICE RELATIVITY trend While American Electric Power Company, Inc. (NYSE:AEP) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the Pretium Resources, Inc. was in BULLISH territory and American Electric Power Company, Inc. was in BEARISH territory.
PVG’s current statistics gauge that the stock candle is BEARISH with HIGH volatility. While AEP’s candle is BEARISH with MEDIUM.
EPS Growth Rate: PVG’s 0% versus AEP’s 5.59%
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 Pretium Resources, Inc. (NYSE:PVG) is predicted at 0% while American Electric Power Company, Inc. (NYSE:AEP) stands at 5.59%. These numbers suggest that AEP 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 PVG stands at 0 while AEP is at 0.5 whereas the debt ratio of the prior is 0 while the debt ratio of the later is 1.31.
The values of the both ratios suggest that AEP 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 for PVG and 2 for AEP which means PVG has Buy rating whereas AEP 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 PVG is $13.66 which is 40.92% of its current price while AEP has price target of 76.24 which is 5.98% 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.
PVG currently has price to earning P/E ratio of 110.55 whereas AEP has 18.59 while the forward P/E ratio for the prior stands at 16.14 and for the later it depicts the value of 17.34.
The price to Book P/B for PVG is 1.68, Price to Sale is at 3.56 and for AEP these ratios stand at 1.88 and 2.22.