The shares of Oasis Petroleum Inc. have increased by more than 46.37% this year alone. The shares recently went up by 3.10% or $0.37 and now trades at $12.31. The shares of Bitauto Holdings Limited (NYSE:BITA), has slumped by -26.51% year to date as of 05/16/2018. The shares currently trade at $23.37 and have been able to report a change of 3.59% over the past one week.
The stock of Oasis Petroleum Inc. and Bitauto Holdings Limited were two of the most active stocks on Wednesday. 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. OAS has an EBITDA margin of 38.77%, this implies that the underlying business of OAS is more profitable. The ROI of OAS is 3.20% while that of BITA is -3.40%. These figures suggest that OAS ventures generate a higher ROI than that of BITA.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, OAS’s free cash flow per share is a negative -47.84.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 current ratio for OAS is 0.60 and that of BITA is 1.20. This implies that it is easier for OAS to cover its immediate obligations over the next 12 months than BITA. The debt ratio of OAS is 0.72 compared to 2.28 for BITA. BITA can be able to settle its long-term debts and thus is a lower financial risk than OAS.Valuation
OAS currently trades at a forward P/E of 18.35, a P/B of 0.95, and a P/S of 2.79 while BITA trades at a forward P/E of 10.07, a P/B of 0.93, and a P/S of 1.21. This means that looking at the earnings, book values and sales basis, BITA 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 OAS is currently at a 0.82% to its one-year price target of 12.21. Looking at its rival pricing, BITA is at a -32.59% relative to its price target of 34.67.
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), OAS is given a 2.20 while 2.10 placed for BITA. This means that analysts are more bullish on the outlook for OAS 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 OAS is 3.50 while that of BITA is just 6.45. This means that analysts are more bullish on the forecast for OAS stock.
The stock of Oasis Petroleum Inc. defeats that of Bitauto Holdings Limited when the two are compared, with OAS taking 5 out of the total factors that were been considered. OAS 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, OAS is the cheaper one on an earnings, book value and sales basis. Finally, the sentiment signal for OAS is better on when it is viewed on short interest.