The shares of Ocwen Financial Corporation (NYSE:OCN) and Allscripts Healthcare Solutions, Inc. (NASDAQ:MDRX) were among the active stocks of the last trading sessions. Ocwen Financial Corporation (NYSE:OCN) declined to -17.85% closing at the price of $3.13 whereas the shares of Allscripts Healthcare Solutions, Inc. (NASDAQ:MDRX) soared 3.74% with the increase of 0.37 points closing at the price of $10.26. Ocwen Financial Corporation has currently decrease -33.12% in its stock over the period of 6-months while its rival Allscripts Healthcare Solutions, Inc. subtracted -17.72% 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 Ocwen Financial Corporation (NYSE:OCN) is 4% while the ROI of Allscripts Healthcare Solutions, Inc. (NASDAQ:MDRX) is -4%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, OCN’s EBITDA Margin is 29.15 whereas MDRX’s is 41.06.
Both the profitability ratios suggest a mixed sentiment for Ocwen Financial Corporation (NYSE:OCN) and Allscripts Healthcare Solutions, Inc. (NASDAQ:MDRX).
EPS & Surprise Factor
Ocwen Financial Corporation (NYSE:OCN) reported $-0.31/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 -93.8 Percent. While, Allscripts Healthcare Solutions, Inc. (NASDAQ:MDRX) reported EPS of $0.18/share in the last quarter. The analysts projected EPS of $0.2/share depicting a Surprise of -10 Percent.
Taking a look at Earnings per Share, Allscripts Healthcare Solutions, Inc. tends to be beating the analyst estimates more than Ocwen Financial Corporation. so MDRX is more profitable than OCN.
Technical Analysis of Ocwen Financial Corporation & Allscripts Healthcare Solutions, Inc.
Moving average convergence divergence (MACD) shows that Ocwen Financial Corporation (NYSE:OCN) is on a PRICE RELATIVITY trend While Allscripts Healthcare Solutions, Inc. (NASDAQ:MDRX) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the Ocwen Financial Corporation was in BEARISH territory and Allscripts Healthcare Solutions, Inc. was in BEARISH territory.
OCN’s current statistics gauge that the stock candle is BEARISH with HIGH volatility. While MDRX’s candle is BULLISH with HIGH.
EPS Growth Rate: OCN’s 3% versus MDRX’s 17%
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 Ocwen Financial Corporation (NYSE:OCN) is predicted at 3% while Allscripts Healthcare Solutions, Inc. (NASDAQ:MDRX) stands at 17%. These numbers suggest that MDRX 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 OCN stands at 0 while MDRX is at 0.9 whereas the debt ratio of the prior is 12.05 while the debt ratio of the later is 1.48.
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 3 for OCN and 2.1 for MDRX which means OCN has Hold rating whereas MDRX 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 OCN is $4.5 which is 30.44% of its current price while MDRX has price target of 15.06 which is 31.87% 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.
OCN currently has price to earning P/E ratio of 20.46 whereas MDRX has 0 while the forward P/E ratio for the prior stands at 0 and for the later it depicts the value of 12.26.
The price to Book P/B for OCN is 0.7, Price to Sale is at 0.37 and for MDRX these ratios stand at 1.63 and 1.1.