The shares of Cinemark Holdings Inc (NYSE:CNK) and Avon Products, Inc. (NYSE:AVP) were among the active stocks of the last trading sessions. Cinemark Holdings Inc (NYSE:CNK) declined to -3.84% closing at the price of $40.55 whereas the shares of Avon Products, Inc. (NYSE:AVP) soared 2.13% with the increase of 0.04 points closing at the price of $1.92. Cinemark Holdings Inc has currently increase 3.29% in its stock over the period of 6-months while its rival Avon Products, Inc. subtracted -12.33% 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 Cinemark Holdings Inc (NYSE:CNK) is 7.7% while the ROI of Avon Products, Inc. (NYSE:AVP) is 12.6%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, CNK’s EBITDA Margin is 9.08 whereas AVP’s is 5.66.
Both the profitability ratios suggest a mixed sentiment for Cinemark Holdings Inc (NYSE:CNK) and Avon Products, Inc. (NYSE:AVP).
EPS & Surprise Factor
Cinemark Holdings Inc (NYSE:CNK) reported $0.43/share EPS for the previous quarter where analysts were predicting an EPS to be $0.36/share Thus beating the analyst Estimates with a Surprise Factor of 19.4 Percent. While, Avon Products, Inc. (NYSE:AVP) reported EPS of $0/share in the last quarter. The analysts projected EPS of $0.01/share depicting a Surprise of -100 Percent.
Taking a look at Earnings per Share, Cinemark Holdings Inc tends to be beating the analyst estimates more than Avon Products, Inc.. so CNK is more profitable than AVP.
Technical Analysis of Cinemark Holdings Inc & Avon Products, Inc.
Moving average convergence divergence (MACD) shows that Cinemark Holdings Inc (NYSE:CNK) is on a PRICE RELATIVITY trend While Avon Products, Inc. (NYSE:AVP) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the Cinemark Holdings Inc was in BULLISH territory and Avon Products, Inc. was in BEARISH territory.
CNK’s current statistics gauge that the stock candle is BEARISH with HIGH volatility. While AVP’s candle is NEUTRAL with MEDIUM.
EPS Growth Rate: CNK’s 15% versus AVP’s 10%
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 Cinemark Holdings Inc (NYSE:CNK) is predicted at 15% while Avon Products, Inc. (NYSE:AVP) stands at 10%. These numbers suggest that CNK 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 CNK stands at 1.2 while AVP is at 1.3 whereas the debt ratio of the prior is 1.4 while the debt ratio of the later is 0.
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 2.2 for CNK and 2.5 for AVP which means CNK has Hold rating whereas AVP 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 CNK is $43.58 which is 6.95% of its current price while AVP has price target of 2.48 which is 22.58% 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.
CNK currently has price to earning P/E ratio of 20.4 whereas AVP has 64 while the forward P/E ratio for the prior stands at 17.98 and for the later it depicts the value of 13.24.
The price to Book P/B for CNK is 3.23, Price to Sale is at 1.57 and for AVP these ratios stand at 0 and 0.15.