The shares of Amarin Corporation plc (NASDAQ:AMRN) and CVS Health Corporation (NYSE:CVS) were among the active stocks of the last trading sessions. Amarin Corporation plc (NASDAQ:AMRN) declined to -3.36% closing at the price of $21.3 whereas the shares of CVS Health Corporation (NYSE:CVS) soared 1.62% with the increase of 1.28 points closing at the price of $80.05. Amarin Corporation plc has currently increase 576.19% in its stock over the period of 6-months while its rival CVS Health Corporation added 24.28% 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 Amarin Corporation plc (NASDAQ:AMRN) is -154.7% while the ROI of CVS Health Corporation (NYSE:CVS) is 9.9%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, AMRN’s EBITDA Margin is -91.69 whereas CVS’s is 7.47.
Both the profitability ratios suggest that CVS Health Corporation (NYSE:CVS) is more suitable investment in terms of profitability and return.
EPS & Surprise Factor
Amarin Corporation plc (NASDAQ:AMRN) reported $-0.08/share EPS for the previous quarter where analysts were predicting an EPS to be $-0.1/share Thus beating the analyst Estimates with a Surprise Factor of 20 Percent. While, CVS Health Corporation (NYSE:CVS) reported EPS of $1.73/share in the last quarter. The analysts projected EPS of $1.71/share depicting a Surprise of 1.2 Percent.
Taking a look at Earnings per Share, Amarin Corporation plc tends to be beating the analyst estimates more than CVS Health Corporation. so AMRN is more profitable than CVS.
Technical Analysis of Amarin Corporation plc & CVS Health Corporation
Moving average convergence divergence (MACD) shows that Amarin Corporation plc (NASDAQ:AMRN) is on a PRICE RELATIVITY trend While CVS Health Corporation (NYSE:CVS) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the Amarin Corporation plc was in BULLISH territory and CVS Health Corporation was in BULLISH territory.
AMRN’s current statistics gauge that the stock candle is BEARISH with MEDIUM volatility. While CVS’s candle is BULLISH with HIGH.
EPS Growth Rate: AMRN’s 22.3% versus CVS’s 10.18%
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 Amarin Corporation plc (NASDAQ:AMRN) is predicted at 22.3% while CVS Health Corporation (NYSE:CVS) stands at 10.18%. These numbers suggest that AMRN 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 AMRN stands at 1.3 while CVS is at 2.3 whereas the debt ratio of the prior is 0 while the debt ratio of the later is 1.83.
The values of the both ratios suggest that CVS 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 1.6 for AMRN and 1.9 for CVS which means AMRN has Buy rating whereas CVS 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 AMRN is $25 which is 14.8% of its current price while CVS has price target of 88.45 which is 9.5% 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.
AMRN currently has price to earning P/E ratio of 0 whereas CVS has 54.79 while the forward P/E ratio for the prior stands at 507.14 and for the later it depicts the value of 10.93.
The price to Book P/B for AMRN is 0, Price to Sale is at 30.36 and for CVS these ratios stand at 2.29 and 0.44.