The shares of ICICI Bank Limited (NYSE:IBN) and Liberty Global plc (NASDAQ:LBTYK) were among the active stocks of the last trading sessions. ICICI Bank Limited (NYSE:IBN) declined to -1.03% closing at the price of $9.64 whereas the shares of Liberty Global plc (NASDAQ:LBTYK) declined -3.93% with the decrease of -1.02 points closing at the price of $24.92. ICICI Bank Limited has currently increase 5.47% in its stock over the period of 6-months while its rival Liberty Global plc subtracted -13.83% 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 ICICI Bank Limited (NYSE:IBN) is 3% while the ROI of Liberty Global plc (NASDAQ:LBTYK) is 0%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, IBN’s EBITDA Margin is NOT AVAILABLE whereas LBTYK’s is 7.12.
Both the profitability ratios suggest that ICICI Bank Limited (NYSE:IBN) is more suitable investment in terms of profitability and return.
EPS & Surprise Factor
ICICI Bank Limited (NYSE:IBN) reported $0.06/share EPS for the previous quarter where analysts were predicting an EPS to be $0.09/share Thus lagging the analyst Estimates with a Surprise Factor of -33.3 Percent. While, Liberty Global plc (NASDAQ:LBTYK) reported EPS of $0.8/share in the last quarter. The analysts projected EPS of $0.1/share depicting a Surprise of 700 Percent.
Taking a look at Earnings per Share, Liberty Global plc tends to be beating the analyst estimates more than ICICI Bank Limited. so LBTYK is more profitable than IBN.
Technical Analysis of ICICI Bank Limited & Liberty Global plc
Moving average convergence divergence (MACD) shows that ICICI Bank Limited (NYSE:IBN) is on a PRICE RELATIVITY trend While Liberty Global plc (NASDAQ:LBTYK) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the ICICI Bank Limited was in BULLISH territory and Liberty Global plc was in BULLISH territory.
IBN’s current statistics gauge that the stock candle is BEARISH with LOW volatility. While LBTYK’s candle is BEARISH with HIGH.
EPS Growth Rate: IBN’s 22% versus LBTYK’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 ICICI Bank Limited (NYSE:IBN) is predicted at 22% while Liberty Global plc (NASDAQ:LBTYK) stands at 0%. These numbers suggest that IBN 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 IBN stands at 0 while LBTYK is at 0 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 2 for IBN and 1.5 for LBTYK which means IBN has Buy rating whereas LBTYK 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 IBN is $13.5 which is 28.59% of its current price while LBTYK has price target of 36.5 which is 31.73% 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.
IBN currently has price to earning P/E ratio of 36.52 whereas LBTYK has 0 while the forward P/E ratio for the prior stands at 13.3 and for the later it depicts the value of 0.
The price to Book P/B for IBN is 0, Price to Sale is at 7.61 and for LBTYK these ratios stand at 3.77 and 0.87.