The shares of Park Hotels & Resorts Inc. have decreased by more than -2.99% this year alone. The shares recently went up by 1.68% or $0.46 and now trades at $27.89. The shares of CymaBay Therapeutics, Inc. (NASDAQ:CBAY), has jumped by 46.74% year to date as of 04/13/2018. The shares currently trade at $13.50 and have been able to report a change of 21.62% over the past one week.
The stock of Park Hotels & Resorts Inc. and CymaBay Therapeutics, Inc. were two of the most active stocks on Friday. Investors seem to be very interested in what happens to the stocks of these two companies but do investors favor one over the other? We will analyze the growth, profitability, risk, valuation, and insider trends of both companies and see which one investors prefer.Profitability and Returns
Growth alone cannot be used to see if the company will be valuable. Shareholders will be the losers if a company invest in ventures that aren’t profitable enough to support upbeat growth. In order for us to accurately measure profitability and return, we will be using the EBITDA margin and Return on Investment (ROI), which balances the difference in capital structure. PK has an EBITDA margin of 25.15%, this implies that the underlying business of PK is more profitable. The ROI of PK is 3.80% while that of CBAY is -23.40%. These figures suggest that PK ventures generate a higher ROI than that of CBAY.Cash Flow
The value of a stock is ultimately determined by the amount of cash flow that the investors have available. Over the last 12 months, PK’s free cash flow per share is a positive 2.16, while that of CBAY is negative -0.08.Liquidity and Financial Risk
The ability of a company to meet up with its short-term obligations and be able to clear its longer-term debts is measured using Liquidity and leverage ratios. The debt ratio of PK is 0.49 compared to 0.07 for CBAY. PK can be able to settle its long-term debts and thus is a lower financial risk than CBAY.Valuation
PK currently trades at a forward P/E of 23.32, a P/B of 0.99, and a P/S of 2.14 while CBAY trades at a P/B of 6.99, and a P/S of 72.58. This means that looking at the earnings, book values and sales basis, PK is the cheaper one. It is very obvious that earnings are the most important factors to investors, thus analysts are most likely to place their bet on the P/E.Analyst Price Targets and Opinions
The mistake some people make is that they think a cheap stock has more value to it. In order to know the value of a stock, there is need to compare its current price to its likely trading price in the future. The price of PK is currently at a -2.14% to its one-year price target of 28.50. Looking at its rival pricing, CBAY is at a -34.56% relative to its price target of 20.63.
When looking at the investment recommendation on say a scale of 1 to 5 (1 being a strong buy, 3 a hold, and 5 a sell), PK is given a 2.60 while 1.80 placed for CBAY. This means that analysts are more bullish on the outlook for PK stocks.Insider Activity and Investor Sentiment
Short interest or otherwise called the percentage of a stock’s tradable shares currently being shorted is another data that investors use to get a handle on sentiment. The short ratio for PK is 2.73 while that of CBAY is just 1.91. This means that analysts are more bullish on the forecast for CBAY stock.
The stock of CymaBay Therapeutics, Inc. defeats that of Park Hotels & Resorts Inc. when the two are compared, with CBAY taking 6 out of the total factors that were been considered. CBAY happens to be more profitable, generates a higher ROI, has higher cash flow per share, higher liquidity and has a lower financial risk. When looking at the stock valuation, CBAY is the cheaper one on an earnings, book value and sales basis. Finally, the sentiment signal for CBAY is better on when it is viewed on short interest.