The shares of ArcelorMittal have decreased by more than -33.04% this year alone. The shares recently went up by 4.77% or $0.63 and now trades at $13.84. The shares of Uranium Energy Corp. (NYSE:UEC), has slumped by -25.11% year to date as of 08/13/2019. The shares currently trade at $0.94 and have been able to report a change of 2.86% over the past one week.
The stock of ArcelorMittal and Uranium Energy Corp. were two of the most active stocks on Tuesday. 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.
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. MT has an EBITDA margin of 5.5%, this implies that the underlying business of MT is more profitable. These figures suggest that MT ventures generate a higher ROI than that of UEC.
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 MT is 1.40 and that of UEC is 15.40. This implies that it is easier for MT to cover its immediate obligations over the next 12 months than UEC. The debt ratio of MT is 0.33 compared to 0.24 for UEC. MT can be able to settle its long-term debts and thus is a lower financial risk than UEC.Valuation
MT currently trades at a forward P/E of 6.39, a P/B of 0.33, and a P/S of 0.20 while UEC trades at a P/B of 2.13, This means that looking at the earnings, book values and sales basis, MT 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.
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 MT is currently at a -49.23% to its one-year price target of 27.26. Looking at its rival pricing, UEC is at a -71.25% relative to its price target of 3.27.
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), MT is given a 1.80 while 1.80 placed for UEC. This means that analysts are equally bullish on their outlook for the two stocks 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 MT is 1.65 while that of UEC is just 12.00. This means that analysts are more bullish on the forecast for MT stock.
The stock of ArcelorMittal defeats that of Uranium Energy Corp. when the two are compared, with MT taking 6 out of the total factors that were been considered. MT 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, MT is the cheaper one on an earnings, book value and sales basis. Finally, the sentiment signal for MT is better on when it is viewed on short interest.