The shares of Whiting Petroleum Corporation (NYSE:WLL) and Axalta Coating Systems Ltd. (NYSE:AXTA) were among the active stocks of the last trading sessions. Whiting Petroleum Corporation (NYSE:WLL) declined to -1.91% closing at the price of $41.07 whereas the shares of Axalta Coating Systems Ltd. (NYSE:AXTA) declined -0.58% with the decrease of -0.15 points closing at the price of $25.6. Whiting Petroleum Corporation has currently increase 3.37% in its stock over the period of 6-months while its rival Axalta Coating Systems Ltd. subtracted -17.31% 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 Whiting Petroleum Corporation (NYSE:WLL) is -12.7% while the ROI of Axalta Coating Systems Ltd. (NYSE:AXTA) is 5.9%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, WLL’s EBITDA Margin is 7.29 whereas AXTA’s is 10.88.
Both the profitability ratios suggest that Axalta Coating Systems Ltd. (NYSE:AXTA) is more suitable investment in terms of profitability and return.
EPS & Surprise Factor
Whiting Petroleum Corporation (NYSE:WLL) reported $0.63/share EPS for the previous quarter where analysts were predicting an EPS to be $0.65/share Thus lagging the analyst Estimates with a Surprise Factor of -3.1 Percent. While, Axalta Coating Systems Ltd. (NYSE:AXTA) reported EPS of $0.36/share in the last quarter. The analysts projected EPS of $0.35/share depicting a Surprise of 2.9 Percent.
Taking a look at Earnings per Share, Axalta Coating Systems Ltd. tends to be beating the analyst estimates more than Whiting Petroleum Corporation. so AXTA is more profitable than WLL.
Technical Analysis of Whiting Petroleum Corporation & Axalta Coating Systems Ltd.
Moving average convergence divergence (MACD) shows that Whiting Petroleum Corporation (NYSE:WLL) is on a PRICE RELATIVITY trend While Axalta Coating Systems Ltd. (NYSE:AXTA) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the Whiting Petroleum Corporation was in BEARISH territory and Axalta Coating Systems Ltd. was in BEARISH territory.
WLL’s current statistics gauge that the stock candle is BULLISH with HIGH volatility. While AXTA’s candle is BEARISH with HIGH.
EPS Growth Rate: WLL’s 0% versus AXTA’s 12.58%
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 Whiting Petroleum Corporation (NYSE:WLL) is predicted at 0% while Axalta Coating Systems Ltd. (NYSE:AXTA) stands at 12.58%. These numbers suggest that AXTA 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 WLL stands at 0.5 while AXTA is at 2.3 whereas the debt ratio of the prior is 0.71 while the debt ratio of the later is 2.98.
The values of the both ratios suggest that AXTA 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 WLL and 2.5 for AXTA which means WLL has Hold rating whereas AXTA 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 WLL is $59.89 which is 31.42% of its current price while AXTA has price target of 33.28 which is 23.08% 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.
WLL currently has price to earning P/E ratio of 0 whereas AXTA has 24.22 while the forward P/E ratio for the prior stands at 9.52 and for the later it depicts the value of 17.23.
The price to Book P/B for WLL is 0.95, Price to Sale is at 2.03 and for AXTA these ratios stand at 4.72 and 1.34.