The shares of Fastenal Company (NASDAQ:FAST) and American Express Company (NYSE:AXP) were among the active stocks of the last trading sessions. Fastenal Company (NASDAQ:FAST) soared to 0.8% closing at the price of $55.13 whereas the shares of American Express Company (NYSE:AXP) soared 1.11% with the increase of 1.19 points closing at the price of $108.5. Fastenal Company has currently increase 6.47% in its stock over the period of 6-months while its rival American Express Company added 6.98% 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 Fastenal Company (NASDAQ:FAST) is 22.4% while the ROI of American Express Company (NYSE:AXP) is 3.7%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, FAST’s EBITDA Margin is 13.34 whereas AXP’s is NOT AVAILABLE.
Both the profitability ratios suggest a mixed sentiment for Fastenal Company (NASDAQ:FAST) and American Express Company (NYSE:AXP).
EPS & Surprise Factor
Fastenal Company (NASDAQ:FAST) reported $0.69/share EPS for the previous quarter where analysts were predicting an EPS to be $0.67/share Thus beating the analyst Estimates with a Surprise Factor of 3 Percent. While, American Express Company (NYSE:AXP) reported EPS of $1.88/share in the last quarter. The analysts projected EPS of $1.77/share depicting a Surprise of 6.2 Percent.
Taking a look at Earnings per Share, American Express Company tends to be beating the analyst estimates more than Fastenal Company. so AXP is more profitable than FAST.
Technical Analysis of Fastenal Company & American Express Company
Moving average convergence divergence (MACD) shows that Fastenal Company (NASDAQ:FAST) is on a PRICE RELATIVITY trend While American Express Company (NYSE:AXP) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the Fastenal Company was in BULLISH territory and American Express Company was in BULLISH territory.
FAST’s current statistics gauge that the stock candle is BULLISH with HIGH volatility. While AXP’s candle is BULLISH with HIGH.
EPS Growth Rate: FAST’s 19% versus AXP’s 12.5%
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 Fastenal Company (NASDAQ:FAST) is predicted at 19% while American Express Company (NYSE:AXP) stands at 12.5%. These numbers suggest that FAST 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 FAST stands at 5.3 while AXP is at 0 whereas the debt ratio of the prior is 0.17 while the debt ratio of the later is 5.91.
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 2.6 for FAST and 2.3 for AXP which means FAST has Hold rating whereas AXP 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 FAST is $57.15 which is 3.53% of its current price while AXP has price target of 116.58 which is 6.93% 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.
FAST currently has price to earning P/E ratio of 22.16 whereas AXP has 15.07 while the forward P/E ratio for the prior stands at 19.67 and for the later it depicts the value of 13.33.
The price to Book P/B for FAST is 6.83, Price to Sale is at 3.28 and for AXP these ratios stand at 4.34 and 2.33.