The shares of Callon Petroleum Company (NYSE:CPE) and Baker Hughes, a GE company (NYSE:BHGE) were among the active stocks of the last trading sessions. Callon Petroleum Company (NYSE:CPE) soared to 4.81% closing at the price of $10.45 whereas the shares of Baker Hughes, a GE company (NYSE:BHGE) declined -3% with the decrease of -0.8 points closing at the price of $25.89. Callon Petroleum Company has currently decrease -22.88% in its stock over the period of 6-months while its rival Baker Hughes, a GE company subtracted -28.08% 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 Callon Petroleum Company (NYSE:CPE) is 5.7% while the ROI of Baker Hughes, a GE company (NYSE:BHGE) is -0.7%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, CPE’s EBITDA Margin is 10.05 whereas BHGE’s is 15.45.
Both the profitability ratios suggest a mixed sentiment for Callon Petroleum Company (NYSE:CPE) and Baker Hughes, a GE company (NYSE:BHGE).
EPS & Surprise Factor
Callon Petroleum Company (NYSE:CPE) reported $0.21/share EPS for the previous quarter where analysts were predicting an EPS to be $0.22/share Thus lagging the analyst Estimates with a Surprise Factor of -4.5 Percent. While, Baker Hughes, a GE company (NYSE:BHGE) reported EPS of $0.19/share in the last quarter. The analysts projected EPS of $0.2/share depicting a Surprise of -5 Percent.
Taking a look at Earnings per Share, Callon Petroleum Company tends to be beating the analyst estimates more than Baker Hughes, a GE company. so CPE is more profitable than BHGE.
Technical Analysis of Callon Petroleum Company & Baker Hughes, a GE company
Moving average convergence divergence (MACD) shows that Callon Petroleum Company (NYSE:CPE) is on a PRICE RELATIVITY trend While Baker Hughes, a GE company (NYSE:BHGE) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the Callon Petroleum Company was in BEARISH territory and Baker Hughes, a GE company was in BEARISH territory.
CPE’s current statistics gauge that the stock candle is BULLISH with HIGH volatility. While BHGE’s candle is BEARISH with HIGH.
EPS Growth Rate: CPE’s 51.37% versus BHGE’s 76.7%
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 Callon Petroleum Company (NYSE:CPE) is predicted at 51.37% while Baker Hughes, a GE company (NYSE:BHGE) stands at 76.7%. These numbers suggest that BHGE 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 CPE stands at 2.6 while BHGE is at 1.9 whereas the debt ratio of the prior is 0.44 while the debt ratio of the later is 0.2.
The values of the both ratios suggest that CPE 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 1.9 for CPE and 2.1 for BHGE which means CPE has Buy rating whereas BHGE 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 CPE is $17.43 which is 40.05% of its current price while BHGE has price target of 37.8 which is 31.51% 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.
CPE currently has price to earning P/E ratio of 15.48 whereas BHGE has 0 while the forward P/E ratio for the prior stands at 7.75 and for the later it depicts the value of 18.09.
The price to Book P/B for CPE is 0.98, Price to Sale is at 5.13 and for BHGE these ratios stand at 0.29 and 1.3.