The shares of Cameco Corporation (NYSE:CCJ) and Two Harbors Investments Corp (NYSE:TWO) were among the active stocks of the last trading sessions. Cameco Corporation (NYSE:CCJ) declined to -2.64% closing at the price of $12.15 whereas the shares of Two Harbors Investments Corp (NYSE:TWO) declined -0.28% with the decrease of -0.04 points closing at the price of $14.28. Cameco Corporation has currently increase 5.56% in its stock over the period of 6-months while its rival Two Harbors Investments Corp subtracted -8.23% 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 Cameco Corporation (NYSE:CCJ) is -2.2% while the ROI of Two Harbors Investments Corp (NYSE:TWO) is 1.3%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, CCJ’s EBITDA Margin is 12.14 whereas TWO’s is NOT AVAILABLE.
Both the profitability ratios suggest that Two Harbors Investments Corp (NYSE:TWO) is more suitable investment in terms of profitability and return.
EPS & Surprise Factor
Cameco Corporation (NYSE:CCJ) reported $0.36/share EPS for the previous quarter where analysts were predicting an EPS to be $0.28/share Thus beating the analyst Estimates with a Surprise Factor of 28.6 Percent. While, Two Harbors Investments Corp (NYSE:TWO) reported EPS of $0.48/share in the last quarter. The analysts projected EPS of $0.47/share depicting a Surprise of 2.1 Percent.
Taking a look at Earnings per Share, Cameco Corporation tends to be beating the analyst estimates more than Two Harbors Investments Corp. so CCJ is more profitable than TWO.
Technical Analysis of Cameco Corporation & Two Harbors Investments Corp
Moving average convergence divergence (MACD) shows that Cameco Corporation (NYSE:CCJ) is on a PRICE RELATIVITY trend While Two Harbors Investments Corp (NYSE:TWO) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the Cameco Corporation was in BULLISH territory and Two Harbors Investments Corp was in BEARISH territory.
CCJ’s current statistics gauge that the stock candle is BEARISH with HIGH volatility. While TWO’s candle is BEARISH with HIGH.
EPS Growth Rate: CCJ’s 9.79% versus TWO’s -2.09%
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 Cameco Corporation (NYSE:CCJ) is predicted at 9.79% while Two Harbors Investments Corp (NYSE:TWO) stands at -2.09%. These numbers suggest that CCJ 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 CCJ stands at 2.1 while TWO is at 0 whereas the debt ratio of the prior is 0.31 while the debt ratio of the later is 6.67.
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 2.4 for CCJ and 2 for TWO which means CCJ has Hold rating whereas TWO 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 CCJ is $10.86 which is -11.88% of its current price while TWO has price target of 16.22 which is 11.96% 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.
CCJ currently has price to earning P/E ratio of 0 whereas TWO has 4.28 while the forward P/E ratio for the prior stands at 98.78 and for the later it depicts the value of 7.47.
The price to Book P/B for CCJ is 1.3, Price to Sale is at 3.04 and for TWO these ratios stand at 0.9 and 5.37.