The shares of Forest City Realty Trust, Inc. (NYSE:FCE-A) and AmerisourceBergen Corporation (Holding Co) (NYSE:ABC) were among the active stocks of the last trading sessions. Forest City Realty Trust, Inc. (NYSE:FCE-A) soared to 0.12% closing at the price of $25.17 whereas the shares of AmerisourceBergen Corporation (Holding Co) (NYSE:ABC) declined -5.15% with the decrease of -4.56 points closing at the price of $84. Forest City Realty Trust, Inc. has currently increase 27.44% in its stock over the period of 6-months while its rival AmerisourceBergen Corporation (Holding Co) subtracted -0.85% 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 Forest City Realty Trust, Inc. (NYSE:FCE-A) is 1.1% while the ROI of AmerisourceBergen Corporation (Holding Co) (NYSE:ABC) is 8.7%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, FCE-A’s EBITDA Margin is 22.75 whereas ABC’s is 9.26.
Both the profitability ratios suggest a mixed sentiment for Forest City Realty Trust, Inc. (NYSE:FCE-A) and AmerisourceBergen Corporation (Holding Co) (NYSE:ABC).
EPS Growth Rate: FCE-A’s 6.1% versus ABC’s 10.1%
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 Forest City Realty Trust, Inc. (NYSE:FCE-A) is predicted at 6.1% while AmerisourceBergen Corporation (Holding Co) (NYSE:ABC) stands at 10.1%. These numbers suggest that ABC 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 FCE-A stands at 0 while ABC is at 0.9 whereas the debt ratio of the prior is 0.85 while the debt ratio of the later is 1.54.
The values of the both ratios suggest that ABC 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 FCE-A and 2.4 for ABC which means FCE-A has Hold rating whereas ABC 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 FCE-A is $25.35 which is 0.71% of its current price while ABC has price target of 96.92 which is 13.33% 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.
FCE-A currently has price to earning P/E ratio of 8.73 whereas ABC has 38.06 while the forward P/E ratio for the prior stands at 0 and for the later it depicts the value of 11.81.
The price to Book P/B for FCE-A is 1.63, Price to Sale is at 7.92 and for ABC these ratios stand at 5.93 and 0.11.