The shares of Gamestop Corporation (NYSE:GME) and CBL & Associates Properties, Inc. (NYSE:CBL) were among the active stocks of the last trading sessions. Gamestop Corporation (NYSE:GME) declined to -0.27% closing at the price of $14.86 whereas the shares of CBL & Associates Properties, Inc. (NYSE:CBL) soared 0.65% with the increase of 0.02 points closing at the price of $3.09. Gamestop Corporation has currently increase 16.92% in its stock over the period of 6-months while its rival CBL & Associates Properties, Inc. subtracted -29.61% 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 Gamestop Corporation (NYSE:GME) is 4.4% while the ROI of CBL & Associates Properties, Inc. (NYSE:CBL) is 5%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, GME’s EBITDA Margin is 3.48 whereas CBL’s is 8.33.
Both the profitability ratios suggest that CBL & Associates Properties, Inc. (NYSE:CBL) is more suitable investment in terms of profitability and return.
EPS & Surprise Factor
Gamestop Corporation (NYSE:GME) reported $0.05/share EPS for the previous quarter where analysts were predicting an EPS to be $0.08/share Thus lagging the analyst Estimates with a Surprise Factor of -37.5 Percent. While, CBL & Associates Properties, Inc. (NYSE:CBL) reported EPS of $0.02/share in the last quarter. The analysts projected EPS of $-0.01/share depicting a Surprise of 300 Percent.
Taking a look at Earnings per Share, CBL & Associates Properties, Inc. tends to be beating the analyst estimates more than Gamestop Corporation. so CBL is more profitable than GME.
Technical Analysis of Gamestop Corporation & CBL & Associates Properties, Inc.
Moving average convergence divergence (MACD) shows that Gamestop Corporation (NYSE:GME) is on a PRICE RELATIVITY trend While CBL & Associates Properties, Inc. (NYSE:CBL) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the Gamestop Corporation was in BULLISH territory and CBL & Associates Properties, Inc. was in BEARISH territory.
GME’s current statistics gauge that the stock candle is BEARISH with MEDIUM volatility. While CBL’s candle is BEARISH with HIGH.
EPS Growth Rate: GME’s 15% versus CBL’s 4.9%
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 Gamestop Corporation (NYSE:GME) is predicted at 15% while CBL & Associates Properties, Inc. (NYSE:CBL) stands at 4.9%. These numbers suggest that GME 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 GME stands at 1.5 while CBL is at 0 whereas the debt ratio of the prior is 0.39 while the debt ratio of the later is 3.84.
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 2.5 for GME and 3.8 for CBL which means GME has Hold rating whereas CBL has Sell 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 GME is $15 which is 0.93% of its current price while CBL has price target of 3.64 which is 15.11% 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.
GME currently has price to earning P/E ratio of 0 whereas CBL has 0 while the forward P/E ratio for the prior stands at 5.28 and for the later it depicts the value of 0.
The price to Book P/B for GME is 0.72, Price to Sale is at 0.16 and for CBL these ratios stand at 0.49 and 0.63.