The shares of Anadarko Petroleum Corporation (NYSE:APC) and AK Steel Holding Corporation (NYSE:AKS) were among the active stocks of the last trading sessions. Anadarko Petroleum Corporation (NYSE:APC) declined to -0.17% closing at the price of $57.79 whereas the shares of AK Steel Holding Corporation (NYSE:AKS) declined -2.3% with the decrease of -0.09 points closing at the price of $3.82. Anadarko Petroleum Corporation has currently decrease -15.4% in its stock over the period of 6-months while its rival AK Steel Holding Corporation subtracted -14.73% 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 Anadarko Petroleum Corporation (NYSE:APC) is -1.4% while the ROI of AK Steel Holding Corporation (NYSE:AKS) is 13%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, APC’s EBITDA Margin is 10.32 whereas AKS’s is 8.53.
Both the profitability ratios suggest a mixed sentiment for Anadarko Petroleum Corporation (NYSE:APC) and AK Steel Holding Corporation (NYSE:AKS).
EPS & Surprise Factor
Anadarko Petroleum Corporation (NYSE:APC) reported $0.82/share EPS for the previous quarter where analysts were predicting an EPS to be $0.84/share Thus lagging the analyst Estimates with a Surprise Factor of -2.4 Percent. While, AK Steel Holding Corporation (NYSE:AKS) reported EPS of $0.21/share in the last quarter. The analysts projected EPS of $0.23/share depicting a Surprise of -8.7 Percent.
Taking a look at Earnings per Share, Anadarko Petroleum Corporation tends to be beating the analyst estimates more than AK Steel Holding Corporation. so APC is more profitable than AKS.
Technical Analysis of Anadarko Petroleum Corporation & AK Steel Holding Corporation
Moving average convergence divergence (MACD) shows that Anadarko Petroleum Corporation (NYSE:APC) is on a PRICE RELATIVITY trend While AK Steel Holding Corporation (NYSE:AKS) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the Anadarko Petroleum Corporation was in BULLISH territory and AK Steel Holding Corporation was in BULLISH territory.
APC’s current statistics gauge that the stock candle is BEARISH with HIGH volatility. While AKS’s candle is BEARISH with HIGH.
EPS Growth Rate: APC’s 12% versus AKS’s 18.54%
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 Anadarko Petroleum Corporation (NYSE:APC) is predicted at 12% while AK Steel Holding Corporation (NYSE:AKS) stands at 18.54%. These numbers suggest that AKS 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 APC stands at 0.9 while AKS is at 2 whereas the debt ratio of the prior is 1.92 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 1.8 for APC and 2.6 for AKS which means APC has Buy rating whereas AKS 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 APC is $86.81 which is 33.43% of its current price while AKS has price target of 4.93 which is 22.52% 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.
APC currently has price to earning P/E ratio of 91.01 whereas AKS has 17.93 while the forward P/E ratio for the prior stands at 12.89 and for the later it depicts the value of 4.88.
The price to Book P/B for APC is 3.31, Price to Sale is at 2.34 and for AKS these ratios stand at 12.32 and 0.18.