The shares of Deere & Company (NYSE:DE) and PDL BioPharma, Inc. (NASDAQ:PDLI) were among the active stocks of the last trading sessions. Deere & Company (NYSE:DE) declined to -1.19% closing at the price of $146.67 whereas the shares of PDL BioPharma, Inc. (NASDAQ:PDLI) soared 1.38% with the increase of 0.04 points closing at the price of $2.94. Deere & Company has currently decrease -0.44% in its stock over the period of 6-months while its rival PDL BioPharma, Inc. added 4.63% 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 Deere & Company (NYSE:DE) is 6.5% while the ROI of PDL BioPharma, Inc. (NASDAQ:PDLI) is 11.9%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, DE’s EBITDA Margin is 15.53 whereas PDLI’s is 374.29.
Both the profitability ratios suggest that PDL BioPharma, Inc. (NASDAQ:PDLI) is more suitable investment in terms of profitability and return.
EPS & Surprise Factor
Deere & Company (NYSE:DE) reported $2.59/share EPS for the previous quarter where analysts were predicting an EPS to be $2.75/share Thus lagging the analyst Estimates with a Surprise Factor of -5.8 Percent. While, PDL BioPharma, Inc. (NASDAQ:PDLI) reported EPS of $0.18/share in the last quarter. The analysts projected EPS of $0.07/share depicting a Surprise of 157.1 Percent.
Taking a look at Earnings per Share, PDL BioPharma, Inc. tends to be beating the analyst estimates more than Deere & Company. so PDLI is more profitable than DE.
Technical Analysis of Deere & Company & PDL BioPharma, Inc.
Moving average convergence divergence (MACD) shows that Deere & Company (NYSE:DE) is on a PRICE RELATIVITY trend While PDL BioPharma, Inc. (NASDAQ:PDLI) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the Deere & Company was in BULLISH territory and PDL BioPharma, Inc. was in BULLISH territory.
DE’s current statistics gauge that the stock candle is BEARISH with HIGH volatility. While PDLI’s candle is BULLISH with HIGH.
EPS Growth Rate: DE’s 26.06% versus PDLI’s 14%
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 Deere & Company (NYSE:DE) is predicted at 26.06% while PDL BioPharma, Inc. (NASDAQ:PDLI) stands at 14%. These numbers suggest that DE 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 DE stands at 0 while PDLI is at 11.1 whereas the debt ratio of the prior is 4.09 while the debt ratio of the later is 0.17.
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 2.1 for DE and 3 for PDLI which means DE has Hold rating whereas PDLI 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 DE is $173.5 which is 15.46% of its current price while PDLI has price target of 3 which is 2% 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.
DE currently has price to earning P/E ratio of 16.93 whereas PDLI has 0 while the forward P/E ratio for the prior stands at 12.57 and for the later it depicts the value of 25.57.
The price to Book P/B for DE is 4.58, Price to Sale is at 1.3 and for PDLI these ratios stand at 0.61 and 2.01.