The shares of Bunge Limited (NYSE:BG) and U.S. Silica Holdings, Inc. (NYSE:SLCA) were among the active stocks of the last trading sessions. Bunge Limited (NYSE:BG) declined to -0.92% closing at the price of $62.75 whereas the shares of U.S. Silica Holdings, Inc. (NYSE:SLCA) declined -1.36% with the decrease of -0.2 points closing at the price of $14.51. Bunge Limited has currently decrease -11.31% in its stock over the period of 6-months while its rival U.S. Silica Holdings, Inc. subtracted -54.99% 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 Bunge Limited (NYSE:BG) is 2.5% while the ROI of U.S. Silica Holdings, Inc. (NYSE:SLCA) is 7.4%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, BG’s EBITDA Margin is 15.45 whereas SLCA’s is 5.76.
Both the profitability ratios suggest a mixed sentiment for Bunge Limited (NYSE:BG) and U.S. Silica Holdings, Inc. (NYSE:SLCA).
EPS & Surprise Factor
Bunge Limited (NYSE:BG) reported $2.52/share EPS for the previous quarter where analysts were predicting an EPS to be $2.39/share Thus beating the analyst Estimates with a Surprise Factor of 5.4 Percent. While, U.S. Silica Holdings, Inc. (NYSE:SLCA) reported EPS of $0.44/share in the last quarter. The analysts projected EPS of $0.59/share depicting a Surprise of -25.4 Percent.
Taking a look at Earnings per Share, Bunge Limited tends to be beating the analyst estimates more than U.S. Silica Holdings, Inc.. so BG is more profitable than SLCA.
Technical Analysis of Bunge Limited & U.S. Silica Holdings, Inc.
Moving average convergence divergence (MACD) shows that Bunge Limited (NYSE:BG) is on a PRICE RELATIVITY trend While U.S. Silica Holdings, Inc. (NYSE:SLCA) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the Bunge Limited was in BEARISH territory and U.S. Silica Holdings, Inc. was in BULLISH territory.
BG’s current statistics gauge that the stock candle is BEARISH with HIGH volatility. While SLCA’s candle is BEARISH with LOW.
EPS Growth Rate: BG’s 10.1% versus SLCA’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 Bunge Limited (NYSE:BG) is predicted at 10.1% while U.S. Silica Holdings, Inc. (NYSE:SLCA) stands at 0%. These numbers suggest that BG 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 BG stands at 1.6 while SLCA is at 2.8 whereas the debt ratio of the prior is 1.31 while the debt ratio of the later is 0.93.
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 2.3 for BG and 2.3 for SLCA which means BG has Hold rating whereas SLCA 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 BG is $78.89 which is 20.46% of its current price while SLCA has price target of 21.4 which is 32.2% 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.
BG currently has price to earning P/E ratio of 36.02 whereas SLCA has 12.76 while the forward P/E ratio for the prior stands at 11.86 and for the later it depicts the value of 13.95.
The price to Book P/B for BG is 1.58, Price to Sale is at 0.19 and for SLCA these ratios stand at 0.82 and 0.72.