The shares of Under Armour, Inc. (NYSE:UA) and Archer-Daniels-Midland Company (NYSE:ADM) were among the active stocks of the last trading sessions. Under Armour, Inc. (NYSE:UA) soared to 1.47% closing at the price of $21.42 whereas the shares of Archer-Daniels-Midland Company (NYSE:ADM) declined -1.48% with the decrease of -0.72 points closing at the price of $48. Under Armour, Inc. has currently increase 31.82% in its stock over the period of 6-months while its rival Archer-Daniels-Midland Company added 9.86% 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 Under Armour, Inc. (NYSE:UA) is 0% while the ROI of Archer-Daniels-Midland Company (NYSE:ADM) is 4.2%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, UA’s EBITDA Margin is 24.68 whereas ADM’s is 12.55.
Both the profitability ratios suggest a mixed sentiment for Under Armour, Inc. (NYSE:UA) and Archer-Daniels-Midland Company (NYSE:ADM).
EPS & Surprise Factor
Under Armour, Inc. (NYSE:UA) reported $0.25/share EPS for the previous quarter where analysts were predicting an EPS to be $0.13/share Thus beating the analyst Estimates with a Surprise Factor of 92.3 Percent. While, Archer-Daniels-Midland Company (NYSE:ADM) reported EPS of $1.02/share in the last quarter. The analysts projected EPS of $0.77/share depicting a Surprise of 32.5 Percent.
Taking a look at Earnings per Share, Under Armour, Inc. tends to be beating the analyst estimates more than Archer-Daniels-Midland Company. so UA is more profitable than ADM.
Technical Analysis of Under Armour, Inc. & Archer-Daniels-Midland Company
Moving average convergence divergence (MACD) shows that Under Armour, Inc. (NYSE:UA) is on a PRICE RELATIVITY trend While Archer-Daniels-Midland Company (NYSE:ADM) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the Under Armour, Inc. was in BULLISH territory and Archer-Daniels-Midland Company was in BEARISH territory.
UA’s current statistics gauge that the stock candle is BULLISH with HIGH volatility. While ADM’s candle is BEARISH with HIGH.
EPS Growth Rate: UA’s 5% versus ADM’s -8.8%
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 Under Armour, Inc. (NYSE:UA) is predicted at 5% while Archer-Daniels-Midland Company (NYSE:ADM) stands at -8.8%. These numbers suggest that UA 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 UA stands at 0 while ADM is at 1.6 whereas the debt ratio of the prior is 0 while the debt ratio of the later is 0.41.
The values of the both ratios suggest that ADM 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 3 for UA and 2.2 for ADM which means UA has Hold rating whereas ADM 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 UA is $16 which is -33.88% of its current price while ADM has price target of 53.18 which is 9.74% 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.
UA currently has price to earning P/E ratio of 0 whereas ADM has 15.97 while the forward P/E ratio for the prior stands at 56.37 and for the later it depicts the value of 13.23.
The price to Book P/B for UA is 4.95, Price to Sale is at 0 and for ADM these ratios stand at 1.45 and 0.43.