The shares of Office Depot, Inc. (NASDAQ:ODP) and MagneGas Corporation (NASDAQ:MNGA) were among the active stocks of the last trading sessions. Office Depot, Inc. (NASDAQ:ODP) declined to -1.17% closing at the price of $3.37 whereas the shares of MagneGas Corporation (NASDAQ:MNGA) soared 1% with the increase of 0 points closing at the price of $0.29. Office Depot, Inc. has currently increase 45.26% in its stock over the period of 6-months while its rival MagneGas Corporation subtracted -54.19% 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 Office Depot, Inc. (NASDAQ:ODP) is 3.1% while the ROI of MagneGas Corporation (NASDAQ:MNGA) is -143.9%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, ODP’s EBITDA Margin is 4.94 whereas MNGA’s is -0.99.
Both the profitability ratios suggest that Office Depot, Inc. (NASDAQ:ODP) is more suitable investment in terms of profitability and return.
EPS & Surprise Factor
Office Depot, Inc. (NASDAQ:ODP) reported $0.13/share EPS for the previous quarter where analysts were predicting an EPS to be $0.12/share Thus beating the analyst Estimates with a Surprise Factor of 8.3 Percent. While, MagneGas Corporation (NASDAQ:MNGA) reported EPS of $-0.24/share in the last quarter. The analysts projected EPS of $-0.13/share depicting a Surprise of -84.6 Percent.
Taking a look at Earnings per Share, Office Depot, Inc. tends to be beating the analyst estimates more than MagneGas Corporation. so ODP is more profitable than MNGA.
Technical Analysis of Office Depot, Inc. & MagneGas Corporation
Moving average convergence divergence (MACD) shows that Office Depot, Inc. (NASDAQ:ODP) is on a PRICE RELATIVITY trend While MagneGas Corporation (NASDAQ:MNGA) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the Office Depot, Inc. was in BULLISH territory and MagneGas Corporation was in BULLISH territory.
ODP’s current statistics gauge that the stock candle is NEUTRAL with HIGH volatility. While MNGA’s candle is BULLISH with HIGH.
EPS Growth Rate: ODP’s -2.2% versus MNGA’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 Office Depot, Inc. (NASDAQ:ODP) is predicted at -2.2% while MagneGas Corporation (NASDAQ:MNGA) stands at 0%. These numbers suggest that MNGA 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 ODP stands at 1.4 while MNGA is at 1.4 whereas the debt ratio of the prior is 0.82 while the debt ratio of the later is 0.08.
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 ODP and 2 for MNGA which means ODP has Hold rating whereas MNGA 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 ODP is $3 which is -12.33% of its current price while MNGA has price target of 6 which is 95.17% 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.
ODP currently has price to earning P/E ratio of 57.12 whereas MNGA has 0 while the forward P/E ratio for the prior stands at 8.99 and for the later it depicts the value of 0.
The price to Book P/B for ODP is 0.87, Price to Sale is at 0.17 and for MNGA these ratios stand at 0.32 and 6.53.