The shares of The Michaels Companies, Inc. (NASDAQ:MIK) and Akorn, Inc. (NASDAQ:AKRX) were among the active stocks of the last trading sessions. The Michaels Companies, Inc. (NASDAQ:MIK) soared to 1.78% closing at the price of $17.77 whereas the shares of Akorn, Inc. (NASDAQ:AKRX) soared 3.78% with the increase of 0.25 points closing at the price of $6.86. The Michaels Companies, Inc. has currently decrease -5.23% in its stock over the period of 6-months while its rival Akorn, Inc. subtracted -51.07% 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 The Michaels Companies, Inc. (NASDAQ:MIK) is 43.4% while the ROI of Akorn, Inc. (NASDAQ:AKRX) is -0.6%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, MIK’s EBITDA Margin is 6.86 whereas AKRX’s is 20.95.
Both the profitability ratios suggest a mixed sentiment for The Michaels Companies, Inc. (NASDAQ:MIK) and Akorn, Inc. (NASDAQ:AKRX).
EPS & Surprise Factor
The Michaels Companies, Inc. (NASDAQ:MIK) reported $0.15/share EPS for the previous quarter where analysts were predicting an EPS to be $0.13/share Thus beating the analyst Estimates with a Surprise Factor of 15.4 Percent. While, Akorn, Inc. (NASDAQ:AKRX) reported EPS of $-0.06/share in the last quarter. The analysts projected EPS of $0.11/share depicting a Surprise of -154.5 Percent.
Taking a look at Earnings per Share, The Michaels Companies, Inc. tends to be beating the analyst estimates more than Akorn, Inc.. so MIK is more profitable than AKRX.
Technical Analysis of The Michaels Companies, Inc. & Akorn, Inc.
Moving average convergence divergence (MACD) shows that The Michaels Companies, Inc. (NASDAQ:MIK) is on a PRICE RELATIVITY trend While Akorn, Inc. (NASDAQ:AKRX) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the The Michaels Companies, Inc. was in BULLISH territory and Akorn, Inc. was in BULLISH territory.
MIK’s current statistics gauge that the stock candle is BULLISH with HIGH volatility. While AKRX’s candle is BULLISH with MEDIUM.
EPS Growth Rate: MIK’s 7.9% versus AKRX’s 15%
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 The Michaels Companies, Inc. (NASDAQ:MIK) is predicted at 7.9% while Akorn, Inc. (NASDAQ:AKRX) stands at 15%. These numbers suggest that AKRX 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 MIK stands at 1.5 while AKRX is at 3.9 whereas the debt ratio of the prior is 0 while the debt ratio of the later is 1.13.
The values of the both ratios suggest that AKRX 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 2.3 for MIK and 2.7 for AKRX which means MIK has Hold rating whereas AKRX 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 MIK is $21.36 which is 16.81% of its current price while AKRX has price target of 9 which is 23.78% 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.
MIK currently has price to earning P/E ratio of 9.37 whereas AKRX has 0 while the forward P/E ratio for the prior stands at 7.11 and for the later it depicts the value of 13.51.
The price to Book P/B for MIK is 0, Price to Sale is at 0.56 and for AKRX these ratios stand at 1.19 and 1.12.