The shares of Oasis Petroleum Inc. have decreased by more than -34.90% this year alone. The shares recently went up by 0.84% or $0.03 and now trades at $3.60. The shares of Washington Prime Group Inc. (NYSE:WPG), has slumped by -13.99% year to date as of 09/12/2019. The shares currently trade at $4.18 and have been able to report a change of 23.67% over the past one week.
The stock of Oasis Petroleum Inc. and Washington Prime Group 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.
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. OAS has an EBITDA margin of 48.83%, this implies that the underlying business of WPG is more profitable. The ROI of OAS is 1.70% while that of WPG is 6.00%. These figures suggest that WPG ventures generate a higher ROI than that of OAS.
The value of a stock is ultimately determined by the amount of cash flow that the investors have available. Over the last 12 months, OAS’s free cash flow per share is a negative -3.47.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 debt ratio of OAS is 0.79 compared to 4.53 for WPG. WPG can be able to settle its long-term debts and thus is a lower financial risk than OAS.
OAS currently trades at a forward P/E of 53.73, a P/B of 0.31, and a P/S of 0.45 while WPG trades at a P/B of 1.17, and a P/S of 1.13. This means that looking at the earnings, book values and sales basis, OAS 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 OAS is currently at a -34.9% to its one-year price target of 5.53. Looking at its rival pricing, WPG is at a 39.33% relative to its price target of 3.00.
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), OAS is given a 2.60 while 4.00 placed for WPG. This means that analysts are more bullish on the outlook for WPG 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 OAS is 4.51 while that of WPG is just 16.20. This means that analysts are more bullish on the forecast for OAS stock.
The stock of Washington Prime Group Inc. defeats that of Oasis Petroleum Inc. when the two are compared, with WPG taking 6 out of the total factors that were been considered. WPG 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, WPG is the cheaper one on an earnings, book value and sales basis. Finally, the sentiment signal for WPG is better on when it is viewed on short interest.