The shares of U.S. Silica Holdings, Inc. have decreased by more than -41.77% this year alone. The shares recently went down by -7.65% or -$1.57 and now trades at $18.96. The shares of Ballard Power Systems Inc. (NASDAQ:BLDP), has slumped by -17.23% year to date as of 10/10/2018. The shares currently trade at $3.65 and have been able to report a change of -14.12% over the past one week.
The stock of U.S. Silica Holdings, Inc. and Ballard Power Systems Inc. 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. SLCA has an EBITDA margin of 19.4%, this implies that the underlying business of SLCA is more profitable. The ROI of SLCA is 7.40% while that of BLDP is -6.30%. These figures suggest that SLCA ventures generate a higher ROI than that of BLDP.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, SLCA’s free cash flow per share is a positive 0.25, while that of BLDP is negative -0.02.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 SLCA is 2.90 and that of BLDP is 2.60. This implies that it is easier for SLCA to cover its immediate obligations over the next 12 months than BLDP. The debt ratio of SLCA is 0.93 compared to 0.05 for BLDP. SLCA can be able to settle its long-term debts and thus is a lower financial risk than BLDP.Valuation
SLCA currently trades at a forward P/E of 8.55, a P/B of 1.09, and a P/S of 1.01 while BLDP trades at a P/B of 5.79, and a P/S of 5.62. This means that looking at the earnings, book values and sales basis, SLCA 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 SLCA is currently at a -39.41% to its one-year price target of 31.29. Looking at its rival pricing, BLDP is at a -24.74% relative to its price target of 4.85.
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), SLCA is given a 2.10 while 2.40 placed for BLDP. This means that analysts are more bullish on the outlook for BLDP 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 SLCA is 7.23 while that of BLDP is just 7.58. This means that analysts are more bullish on the forecast for SLCA stock.
The stock of Ballard Power Systems Inc. defeats that of U.S. Silica Holdings, Inc. when the two are compared, with BLDP taking 4 out of the total factors that were been considered. BLDP 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, BLDP is the cheaper one on an earnings, book value and sales basis. Finally, the sentiment signal for BLDP is better on when it is viewed on short interest.