The shares of Apache Corporation (NYSE:APA) and Sorrento Therapeutics, Inc. (NASDAQ:SRNE) were among the active stocks of the last trading sessions. Apache Corporation (NYSE:APA) declined to -0.64% closing at the price of $37.34 whereas the shares of Sorrento Therapeutics, Inc. (NASDAQ:SRNE) soared 2.36% with the increase of 0.08 points closing at the price of $3.47. Apache Corporation has currently decrease -9.48% in its stock over the period of 6-months while its rival Sorrento Therapeutics, Inc. subtracted -54.04% 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 Apache Corporation (NYSE:APA) is 10.2% while the ROI of Sorrento Therapeutics, Inc. (NASDAQ:SRNE) is 27.4%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, APA’s EBITDA Margin is 5.97 whereas SRNE’s is 6.37.
Both the profitability ratios suggest that Sorrento Therapeutics, Inc. (NASDAQ:SRNE) is more suitable investment in terms of profitability and return.
EPS & Surprise Factor
Apache Corporation (NYSE:APA) reported $0.63/share EPS for the previous quarter where analysts were predicting an EPS to be $0.47/share Thus beating the analyst Estimates with a Surprise Factor of 34 Percent. While, Sorrento Therapeutics, Inc. (NASDAQ:SRNE) reported EPS of $-0.73/share in the last quarter. The analysts projected EPS of $-0.2/share depicting a Surprise of -265 Percent.
Taking a look at Earnings per Share, Apache Corporation tends to be beating the analyst estimates more than Sorrento Therapeutics, Inc.. so APA is more profitable than SRNE.
Technical Analysis of Apache Corporation & Sorrento Therapeutics, Inc.
Moving average convergence divergence (MACD) shows that Apache Corporation (NYSE:APA) is on a PRICE RELATIVITY trend While Sorrento Therapeutics, Inc. (NASDAQ:SRNE) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the Apache Corporation was in BEARISH territory and Sorrento Therapeutics, Inc. was in BULLISH territory.
APA’s current statistics gauge that the stock candle is BEARISH with MEDIUM volatility. While SRNE’s candle is BEARISH with HIGH.
EPS Growth Rate: APA’s 0% versus SRNE’s 37%
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 Apache Corporation (NYSE:APA) is predicted at 0% while Sorrento Therapeutics, Inc. (NASDAQ:SRNE) stands at 37%. These numbers suggest that SRNE 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 APA stands at 1.3 while SRNE is at 1.4 whereas the debt ratio of the prior is 1.08 while the debt ratio of the later is 0.07.
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 APA and 1.7 for SRNE which means APA has Hold rating whereas SRNE 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 APA is $50.8 which is 26.5% of its current price while SRNE has price target of 21.67 which is 83.99% 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.
APA currently has price to earning P/E ratio of 14.74 whereas SRNE has 0 while the forward P/E ratio for the prior stands at 15.64 and for the later it depicts the value of 0.
The price to Book P/B for APA is 1.88, Price to Sale is at 2.22 and for SRNE these ratios stand at 1.37 and 2.6.