The shares of Harley-Davidson, Inc. (NYSE:HOG) and Big Lots, Inc. (NYSE:BIG) were among the active stocks of the last trading sessions. Harley-Davidson, Inc. (NYSE:HOG) declined to -3.14% closing at the price of $40.36 whereas the shares of Big Lots, Inc. (NYSE:BIG) declined -7.73% with the decrease of -3.37 points closing at the price of $40.25. Harley-Davidson, Inc. has currently decrease -1.66% in its stock over the period of 6-months while its rival Big Lots, Inc. subtracted -4.26% 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 Harley-Davidson, Inc. (NYSE:HOG) is 6.8% while the ROI of Big Lots, Inc. (NYSE:BIG) is 22.6%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, HOG’s EBITDA Margin is 12.76 whereas BIG’s is 5.84.
Both the profitability ratios suggest a mixed sentiment for Harley-Davidson, Inc. (NYSE:HOG) and Big Lots, Inc. (NYSE:BIG).
EPS & Surprise Factor
Harley-Davidson, Inc. (NYSE:HOG) reported $1.52/share EPS for the previous quarter where analysts were predicting an EPS to be $1.35/share Thus beating the analyst Estimates with a Surprise Factor of 12.6 Percent. While, Big Lots, Inc. (NYSE:BIG) reported EPS of $0.59/share in the last quarter. The analysts projected EPS of $0.67/share depicting a Surprise of -11.9 Percent.
Taking a look at Earnings per Share, Harley-Davidson, Inc. tends to be beating the analyst estimates more than Big Lots, Inc.. so HOG is more profitable than BIG.
Technical Analysis of Harley-Davidson, Inc. & Big Lots, Inc.
Moving average convergence divergence (MACD) shows that Harley-Davidson, Inc. (NYSE:HOG) is on a PRICE RELATIVITY trend While Big Lots, Inc. (NYSE:BIG) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the Harley-Davidson, Inc. was in BEARISH territory and Big Lots, Inc. was in BULLISH territory.
HOG’s current statistics gauge that the stock candle is BEARISH with HIGH volatility. While BIG’s candle is BEARISH with HIGH.
EPS Growth Rate: HOG’s 11.4% versus BIG’s 6.7%
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 Harley-Davidson, Inc. (NYSE:HOG) is predicted at 11.4% while Big Lots, Inc. (NYSE:BIG) stands at 6.7%. These numbers suggest that HOG 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 HOG stands at 1.4 while BIG is at 1.7 whereas the debt ratio of the prior is 3.3 while the debt ratio of the later is 0.7.
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 2.6 for HOG and 2.3 for BIG which means HOG has Hold rating whereas BIG 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 HOG is $47.31 which is 14.69% of its current price while BIG has price target of 47.18 which is 14.69% 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.
HOG currently has price to earning P/E ratio of 12.43 whereas BIG has 10.27 while the forward P/E ratio for the prior stands at 11.25 and for the later it depicts the value of 8.41.
The price to Book P/B for HOG is 3.11, Price to Sale is at 1.19 and for BIG these ratios stand at 2.73 and 0.32.