The shares of AVEO Pharmaceuticals, Inc. (NASDAQ:AVEO) and Hanesbrands Inc. (NYSE:HBI) were among the active stocks of the last trading sessions. AVEO Pharmaceuticals, Inc. (NASDAQ:AVEO) declined to -0.5% closing at the price of $2 whereas the shares of Hanesbrands Inc. (NYSE:HBI) declined -1.18% with the decrease of -0.2 points closing at the price of $16.71. AVEO Pharmaceuticals, Inc. has currently decrease -7.83% in its stock over the period of 6-months while its rival Hanesbrands Inc. subtracted -0.12% 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 AVEO Pharmaceuticals, Inc. (NASDAQ:AVEO) is 129.7% while the ROI of Hanesbrands Inc. (NYSE:HBI) is 15.2%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, AVEO’s EBITDA Margin is NOT AVAILABLE whereas HBI’s is 9.73.
Both the profitability ratios suggest that AVEO Pharmaceuticals, Inc. (NASDAQ:AVEO) is more suitable investment in terms of profitability and return.
EPS & Surprise Factor
AVEO Pharmaceuticals, Inc. (NASDAQ:AVEO) reported $0.03/share EPS for the previous quarter where analysts were predicting an EPS to be $-0.06/share Thus beating the analyst Estimates with a Surprise Factor of 150 Percent. While, Hanesbrands Inc. (NYSE:HBI) reported EPS of $0.55/share in the last quarter. The analysts projected EPS of $0.55/share depicting a Surprise of 0 Percent.
Taking a look at Earnings per Share, AVEO Pharmaceuticals, Inc. tends to be beating the analyst estimates more than Hanesbrands Inc.. so AVEO is more profitable than HBI.
Technical Analysis of AVEO Pharmaceuticals, Inc. & Hanesbrands Inc.
Moving average convergence divergence (MACD) shows that AVEO Pharmaceuticals, Inc. (NASDAQ:AVEO) is on a PRICE RELATIVITY trend While Hanesbrands Inc. (NYSE:HBI) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the AVEO Pharmaceuticals, Inc. was in BEARISH territory and Hanesbrands Inc. was in BEARISH territory.
AVEO’s current statistics gauge that the stock candle is BEARISH with HIGH volatility. While HBI’s candle is BEARISH with HIGH.
EPS Growth Rate: AVEO’s 0% versus HBI’s -0.9%
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 AVEO Pharmaceuticals, Inc. (NASDAQ:AVEO) is predicted at 0% while Hanesbrands Inc. (NYSE:HBI) stands at -0.9%. These numbers suggest that AVEO 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 AVEO stands at 1.2 while HBI is at 1.8 whereas the debt ratio of the prior is 0 while the debt ratio of the later is 5.04.
The values of the both ratios suggest that HBI 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 2 for AVEO and 2.5 for HBI which means AVEO has Buy rating whereas HBI 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 AVEO is $5.5 which is 63.64% of its current price while HBI has price target of 20.21 which is 17.32% 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.
AVEO currently has price to earning P/E ratio of 0 whereas HBI has 13.2 while the forward P/E ratio for the prior stands at 0 and for the later it depicts the value of 9.21.
The price to Book P/B for AVEO is 0, Price to Sale is at 36.25 and for HBI these ratios stand at 6.99 and 0.92.