Which one offer More Market Value? – Zion Oil & Gas, Inc. (ZN), Carlisle Companies Incorporated (CSL)

The shares of Zion Oil & Gas, Inc. have decreased by more than -23.77% this year alone. The shares recently went up by 14.63% or $0.04 and now trades at $0.32. The shares of Carlisle Companies Incorporated (NYSE:CSL), has jumped by 40.39% year to date as of 09/10/2019. The shares currently trade at $141.12 and have been able to report a change of -0.49% over the past one week.

The stock of Zion Oil & Gas, Inc. and Carlisle Companies Incorporated 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.

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. These figures suggest that CSL ventures generate a higher ROI than that of ZN.

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 ZN is 2.40 and that of CSL is 3.00. This implies that it is easier for ZN to cover its immediate obligations over the next 12 months than CSL. The debt ratio of ZN is 0.31 compared to 0.62 for CSL. CSL can be able to settle its long-term debts and thus is a lower financial risk than ZN.

Valuation

ZN currently trades at a P/B of 3.18, while CSL trades at a forward P/E of 15.81, a P/B of 3.11, and a P/S of 1.73. This means that looking at the earnings, book values and sales basis, CSL 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. Looking at its rival pricing, CSL is at a -6.67% relative to its price target of 151.20.

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 ZN is 3.65 while that of CSL is just 6.14. This means that analysts are more bullish on the forecast for ZN stock.

Conclusion

The stock of Zion Oil & Gas, Inc. defeats that of Carlisle Companies Incorporated when the two are compared, with ZN taking 6 out of the total factors that were been considered. ZN 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, ZN is the cheaper one on an earnings, book value and sales basis. Finally, the sentiment signal for ZN is better on when it is viewed on short interest.