The shares of Invitation Homes Inc. have increased by more than 1.02% this year alone. The shares recently went up by 1.10% or $0.26 and now trades at $23.81. The shares of Collegium Pharmaceutical, Inc. (NASDAQ:COLL), has slumped by -4.23% year to date as of 08/09/2018. The shares currently trade at $17.68 and have been able to report a change of -9.59% over the past one week.
The stock of Invitation Homes Inc. and Collegium Pharmaceutical, Inc. were two of the most active stocks on Thursday. 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. The ROI of INVH is 0.70% while that of COLL is -71.40%. These figures suggest that INVH ventures generate a higher ROI than that of COLL.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, INVH’s free cash flow per share is a positive 2.46, while that of COLL is positive 0.1.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 INVH is 1.14 compared to 0.13 for COLL. INVH can be able to settle its long-term debts and thus is a lower financial risk than COLL.Valuation
INVH currently trades at a forward P/E of 190.48, a P/B of 1.46, and a P/S of 9.98 while COLL trades at a forward P/E of 94.55, a P/B of 6.41, and a P/S of 6.85. This means that looking at the earnings, book values and sales basis, INVH 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 INVH is currently at a -7.68% to its one-year price target of 25.79. Looking at its rival pricing, COLL is at a -47.22% relative to its price target of 33.50.
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), INVH is given a 1.70 while 1.60 placed for COLL. This means that analysts are more bullish on the outlook for INVH 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 INVH is 8.34 while that of COLL is just 4.93. This means that analysts are more bullish on the forecast for COLL stock.
The stock of Invitation Homes Inc. defeats that of Collegium Pharmaceutical, Inc. when the two are compared, with INVH taking 4 out of the total factors that were been considered. INVH 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, INVH is the cheaper one on an earnings, book value and sales basis. Finally, the sentiment signal for INVH is better on when it is viewed on short interest.