The shares of Cemex S.A.B. de C.V. (NYSE:CX) and The AES Corporation (NYSE:AES) were among the active stocks of the last trading sessions. Cemex S.A.B. de C.V. (NYSE:CX) soared to 0% closing at the price of $5.41 whereas the shares of The AES Corporation (NYSE:AES) declined -0.95% with the decrease of -0.14 points closing at the price of $14.6. Cemex S.A.B. de C.V. has currently decrease -6.88% in its stock over the period of 6-months while its rival The AES Corporation added 18.03% 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 Cemex S.A.B. de C.V. (NYSE:CX) is 7.9% while the ROI of The AES Corporation (NYSE:AES) is -0.8%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, CX’s EBITDA Margin is 8.08 whereas AES’s is 8.59.
Both the profitability ratios suggest a mixed sentiment for Cemex S.A.B. de C.V. (NYSE:CX) and The AES Corporation (NYSE:AES).
EPS & Surprise Factor
Cemex S.A.B. de C.V. (NYSE:CX) reported $0.1/share EPS for the previous quarter where analysts were predicting an EPS to be $0.16/share Thus lagging the analyst Estimates with a Surprise Factor of -37.5 Percent. While, The AES Corporation (NYSE:AES) reported EPS of $0.25/share in the last quarter. The analysts projected EPS of $0.28/share depicting a Surprise of -10.7 Percent.
Taking a look at Earnings per Share, The AES Corporation tends to be beating the analyst estimates more than Cemex S.A.B. de C.V.. so AES is more profitable than CX.
Technical Analysis of Cemex S.A.B. de C.V. & The AES Corporation
Moving average convergence divergence (MACD) shows that Cemex S.A.B. de C.V. (NYSE:CX) is on a PRICE RELATIVITY trend While The AES Corporation (NYSE:AES) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the Cemex S.A.B. de C.V. was in BEARISH territory and The AES Corporation was in BEARISH territory.
CX’s current statistics gauge that the stock candle is BEARISH with HIGH volatility. While AES’s candle is BEARISH with LOW.
EPS Growth Rate: CX’s 14.1% versus AES’s 8.6%
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 Cemex S.A.B. de C.V. (NYSE:CX) is predicted at 14.1% while The AES Corporation (NYSE:AES) stands at 8.6%. These numbers suggest that CX 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 CX stands at 0.8 while AES is at 1.3 whereas the debt ratio of the prior is 1.04 while the debt ratio of the later is 5.92.
The values of the both ratios suggest that AES 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 CX and 2.7 for AES which means CX has Hold rating whereas AES 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 CX is $9.31 which is 41.89% of its current price while AES has price target of 14.33 which is -1.88% 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.
CX currently has price to earning P/E ratio of 18.34 whereas AES has 34.35 while the forward P/E ratio for the prior stands at 9.3 and for the later it depicts the value of 11.16.
The price to Book P/B for CX is 0.9, Price to Sale is at 0.58 and for AES these ratios stand at 2.91 and 0.92.