The shares of Genuine Parts Company (NYSE:GPC) and Michael Kors Holdings Limited (NYSE:KORS) were among the active stocks of the last trading sessions. Genuine Parts Company (NYSE:GPC) soared to 5.97% closing at the price of $100.82 whereas the shares of Michael Kors Holdings Limited (NYSE:KORS) declined -3.46% with the decrease of -2.16 points closing at the price of $60.22. Genuine Parts Company has currently increase 14.89% in its stock over the period of 6-months while its rival Michael Kors Holdings Limited subtracted -7.37% 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 Genuine Parts Company (NYSE:GPC) is 10.1% while the ROI of Michael Kors Holdings Limited (NYSE:KORS) is 21.5%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, GPC’s EBITDA Margin is 12.95 whereas KORS’s is 8.42.
Both the profitability ratios suggest a mixed sentiment for Genuine Parts Company (NYSE:GPC) and Michael Kors Holdings Limited (NYSE:KORS).
EPS & Surprise Factor
Genuine Parts Company (NYSE:GPC) reported $1.48/share EPS for the previous quarter where analysts were predicting an EPS to be $1.48/share Thus meeting the analyst Estimates with a Surprise Factor of 0 Percent. While, Michael Kors Holdings Limited (NYSE:KORS) reported EPS of $1.32/share in the last quarter. The analysts projected EPS of $0.95/share depicting a Surprise of 38.9 Percent.
Taking a look at Earnings per Share, Michael Kors Holdings Limited tends to be beating the analyst estimates more than Genuine Parts Company. so KORS is more profitable than GPC.
Technical Analysis of Genuine Parts Company & Michael Kors Holdings Limited
Moving average convergence divergence (MACD) shows that Genuine Parts Company (NYSE:GPC) is on a PRICE RELATIVITY trend While Michael Kors Holdings Limited (NYSE:KORS) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the Genuine Parts Company was in BEARISH territory and Michael Kors Holdings Limited was in BEARISH territory.
GPC’s current statistics gauge that the stock candle is BULLISH with HIGH volatility. While KORS’s candle is BEARISH with HIGH.
EPS Growth Rate: GPC’s 12.6% versus KORS’s 7.1%
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 Genuine Parts Company (NYSE:GPC) is predicted at 12.6% while Michael Kors Holdings Limited (NYSE:KORS) stands at 7.1%. These numbers suggest that GPC 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 GPC stands at 1.3 while KORS is at 1.4 whereas the debt ratio of the prior is 0.9 while the debt ratio of the later is 0.4.
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 3 for GPC and 2.4 for KORS which means GPC has Hold rating whereas KORS 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 GPC is $98.43 which is -2.43% of its current price while KORS has price target of 77.38 which is 22.18% 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.
GPC currently has price to earning P/E ratio of 20.58 whereas KORS has 13.75 while the forward P/E ratio for the prior stands at 17.05 and for the later it depicts the value of 11.25.
The price to Book P/B for GPC is 4.21, Price to Sale is at 0.83 and for KORS these ratios stand at 4.42 and 1.76.