The shares of TherapeuticsMD, Inc. have decreased by more than -12.07% this year alone. The shares recently went up by 1.52% or $0.05 and now trades at $3.35. The shares of Clean Harbors, Inc. (NYSE:CLH), has jumped by 57.45% year to date as of 09/12/2019. The shares currently trade at $77.70 and have been able to report a change of 4.27% over the past one week.
The stock of TherapeuticsMD, Inc. and Clean Harbors, 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.
When a company is able to grow consistently in terms of earnings at a high compound rate have the highest likelihood of creating value for its shareholders over time. Analysts have predicted that TXMD will grow it’s earning at a 19.50% annual rate in the next 5 years. This is in contrast to CLH which will have a positive growth at a 0.40% annual rate. This means that the higher growth rate of TXMD implies a greater potential for capital appreciation over the years.
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 TXMD is -76.20% while that of CLH is 5.50%. These figures suggest that CLH ventures generate a higher ROI than that of TXMD.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, TXMD’s free cash flow per share is a negative -0.31, while that of CLH is positive 1.49.
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 TXMD is 5.20 and that of CLH is 1.90. This implies that it is easier for TXMD to cover its immediate obligations over the next 12 months than CLH. The debt ratio of TXMD is 23.96 compared to 1.32 for CLH. TXMD can be able to settle its long-term debts and thus is a lower financial risk than CLH.Valuation
TXMD currently trades at a P/B of 111.67, and a P/S of 41.93 while CLH trades at a forward P/E of 33.94, a P/B of 3.59, and a P/S of 1.30. This means that looking at the earnings, book values and sales basis, CLH 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 TXMD is currently at a -70.01% to its one-year price target of 11.17. Looking at its rival pricing, CLH is at a -6.67% relative to its price target of 83.25.
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), TXMD is given a 1.90 while 2.10 placed for CLH. This means that analysts are more bullish on the outlook for CLH 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 TXMD is 26.80 while that of CLH is just 4.88. This means that analysts are more bullish on the forecast for CLH stock.
The stock of TherapeuticsMD, Inc. defeats that of Clean Harbors, Inc. when the two are compared, with TXMD taking 5 out of the total factors that were been considered. TXMD 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, TXMD is the cheaper one on an earnings, book value and sales basis. Finally, the sentiment signal for TXMD is better on when it is viewed on short interest.