The shares of Sally Beauty Holdings, Inc. (NYSE:SBH) and California Resources Corporation (NYSE:CRC) were among the active stocks of the last trading sessions. Sally Beauty Holdings, Inc. (NYSE:SBH) soared to 2.71% closing at the price of $18.93 whereas the shares of California Resources Corporation (NYSE:CRC) declined -6.58% with the decrease of -2.01 points closing at the price of $28.52. Sally Beauty Holdings, Inc. has currently increase 24.29% in its stock over the period of 6-months while its rival California Resources Corporation subtracted -9.2% 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 Sally Beauty Holdings, Inc. (NYSE:SBH) is 23.1% while the ROI of California Resources Corporation (NYSE:CRC) is 1.5%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, SBH’s EBITDA Margin is 6.82 whereas CRC’s is 9.1.
Both the profitability ratios suggest a mixed sentiment for Sally Beauty Holdings, Inc. (NYSE:SBH) and California Resources Corporation (NYSE:CRC).
EPS & Surprise Factor
Sally Beauty Holdings, Inc. (NYSE:SBH) reported $0.6/share EPS for the previous quarter where analysts were predicting an EPS to be $0.6/share Thus meeting the analyst Estimates with a Surprise Factor of 0 Percent. While, California Resources Corporation (NYSE:CRC) reported EPS of $0.81/share in the last quarter. The analysts projected EPS of $0.36/share depicting a Surprise of 125 Percent.
Taking a look at Earnings per Share, California Resources Corporation tends to be beating the analyst estimates more than Sally Beauty Holdings, Inc.. so CRC is more profitable than SBH.
Technical Analysis of Sally Beauty Holdings, Inc. & California Resources Corporation
Moving average convergence divergence (MACD) shows that Sally Beauty Holdings, Inc. (NYSE:SBH) is on a PRICE RELATIVITY trend While California Resources Corporation (NYSE:CRC) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the Sally Beauty Holdings, Inc. was in BULLISH territory and California Resources Corporation was in BEARISH territory.
SBH’s current statistics gauge that the stock candle is BULLISH with HIGH volatility. While CRC’s candle is BEARISH with MEDIUM.
EPS Growth Rate: SBH’s 8.3% versus CRC’s 0%
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 Sally Beauty Holdings, Inc. (NYSE:SBH) is predicted at 8.3% while California Resources Corporation (NYSE:CRC) stands at 0%. These numbers suggest that SBH 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 SBH stands at 2.1 while CRC is at 0.6 whereas the debt ratio of the prior is 0 while the debt ratio of the later is 0.
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 3.5 for SBH and 2.4 for CRC which means SBH has Sell rating whereas CRC 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 SBH is $14.94 which is -26.71% of its current price while CRC has price target of 50.57 which is 43.6% 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.
SBH currently has price to earning P/E ratio of 11.03 whereas CRC has 0 while the forward P/E ratio for the prior stands at 8.99 and for the later it depicts the value of 7.53.
The price to Book P/B for SBH is 0, Price to Sale is at 0.56 and for CRC these ratios stand at 0 and 0.71.