The shares of Flex Ltd. (NASDAQ:FLEX) and New Residential Investment Corp. (NYSE:NRZ) were among the active stocks of the last trading sessions. Flex Ltd. (NASDAQ:FLEX) soared to 1.05% closing at the price of $8.68 whereas the shares of New Residential Investment Corp. (NYSE:NRZ) soared 0.53% with the increase of 0.09 points closing at the price of $17.22. Flex Ltd. has currently decrease -38.35% in its stock over the period of 6-months while its rival New Residential Investment Corp. subtracted -4.17% 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 Flex Ltd. (NASDAQ:FLEX) is 9.3% while the ROI of New Residential Investment Corp. (NYSE:NRZ) is 4.9%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, FLEX’s EBITDA Margin is 7.39 whereas NRZ’s is NOT AVAILABLE.
Both the profitability ratios suggest a mixed sentiment for Flex Ltd. (NASDAQ:FLEX) and New Residential Investment Corp. (NYSE:NRZ).
EPS & Surprise Factor
Flex Ltd. (NASDAQ:FLEX) reported $0.29/share EPS for the previous quarter where analysts were predicting an EPS to be $0.28/share Thus beating the analyst Estimates with a Surprise Factor of 3.6 Percent. While, New Residential Investment Corp. (NYSE:NRZ) reported EPS of $0.63/share in the last quarter. The analysts projected EPS of $0.55/share depicting a Surprise of 14.5 Percent.
Taking a look at Earnings per Share, New Residential Investment Corp. tends to be beating the analyst estimates more than Flex Ltd.. so NRZ is more profitable than FLEX.
Technical Analysis of Flex Ltd. & New Residential Investment Corp.
Moving average convergence divergence (MACD) shows that Flex Ltd. (NASDAQ:FLEX) is on a PRICE RELATIVITY trend While New Residential Investment Corp. (NYSE:NRZ) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the Flex Ltd. was in BEARISH territory and New Residential Investment Corp. was in BEARISH territory.
FLEX’s current statistics gauge that the stock candle is BEARISH with HIGH volatility. While NRZ’s candle is BEARISH with HIGH.
EPS Growth Rate: FLEX’s 15.37% versus NRZ’s -7.34%
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 Flex Ltd. (NASDAQ:FLEX) is predicted at 15.37% while New Residential Investment Corp. (NYSE:NRZ) stands at -7.34%. These numbers suggest that FLEX 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 FLEX stands at 1.2 while NRZ is at 0 whereas the debt ratio of the prior is 0.94 while the debt ratio of the later is 3.77.
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 2.3 for FLEX and 1.8 for NRZ which means FLEX has Hold rating whereas NRZ has Buy 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 FLEX is $13.2 which is 34.24% of its current price while NRZ has price target of 19.56 which is 11.96% 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.
FLEX currently has price to earning P/E ratio of 15.39 whereas NRZ has 4.57 while the forward P/E ratio for the prior stands at 7.1 and for the later it depicts the value of 7.41.
The price to Book P/B for FLEX is 1.48, Price to Sale is at 0.17 and for NRZ these ratios stand at 1.02 and 2.37.