The shares of EP Energy Corporation have decreased by more than -7.20% this year alone. The shares recently went down by -9.88% or -$0.24 and now trades at $2.19. The shares of Control4 Corporation (NASDAQ:CTRL), has slumped by -6.42% year to date as of 10/10/2018. The shares currently trade at $27.85 and have been able to report a change of -17.09% over the past one week.
The stock of EP Energy Corporation and Control4 Corporation 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. EPE has an EBITDA margin of 53.02%, this implies that the underlying business of EPE is more profitable. The ROI of EPE is 3.00% while that of CTRL is 9.20%. These figures suggest that CTRL ventures generate a higher ROI than that of EPE.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, EPE’s free cash flow per share is a negative -7.97.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 EPE is 0.70 and that of CTRL is 4.00. This implies that it is easier for EPE to cover its immediate obligations over the next 12 months than CTRL. The debt ratio of EPE is 12.11 compared to 0.00 for CTRL. EPE can be able to settle its long-term debts and thus is a lower financial risk than CTRL.Valuation
EPE currently trades at a forward P/E of 31.29, a P/B of 1.53, and a P/S of 0.58 while CTRL trades at a forward P/E of 18.12, a P/B of 4.24, and a P/S of 2.89. This means that looking at the earnings, book values and sales basis, EPE 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 EPE is currently at a -22.89% to its one-year price target of 2.84. Looking at its rival pricing, CTRL is at a -20.15% relative to its price target of 34.88.
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), EPE is given a 3.30 while 2.00 placed for CTRL. This means that analysts are more bullish on the outlook for EPE 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 EPE is 6.78 while that of CTRL is just 4.65. This means that analysts are more bullish on the forecast for CTRL stock.
The stock of EP Energy Corporation defeats that of Control4 Corporation when the two are compared, with EPE taking 4 out of the total factors that were been considered. EPE 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, EPE is the cheaper one on an earnings, book value and sales basis. Finally, the sentiment signal for EPE is better on when it is viewed on short interest.