Fitbit Inc. (FIT) and Century Aluminum Company (CENX) both have caught the attention of the investment community that recently hit new highs. Naturally, this has caught the attention of the investment community. But which is the better investment? To answer this question, we will compare the two companies across various metrics including growth, profitability, risk, return, dividends, and valuation.
The company has grown sales at a 14.00% annual rate over the past five years, putting it in the medium growth category. FIT has a net profit margin of -22.40% and is less profitable than the average company in the Scientific & Technical Instruments industry. In terms of efficiency, FIT has an asset turnover ratio of 1.06. This figure represents the amount of revenue a company generates per dollar of assets. FIT’s financial leverage ratio is 1.81, which indicates that the company’s asset base is primarily funded by equity capital. Company’s return on equity, which is really just the product of the company’s profit margin, asset turnover, and financial leverage ratios, is -54.00%, which is worse than the Scientific & Technical Instruments industry average ROE.
Fitbit Inc. (FIT) free cash flow yield, which represents the amount of cash available to investors before dividends, expressed as a percentage of the stock price, is 1.18. All else equal, companies with higher FCF yields are viewed as cheaper. The average investment recommendation for FIT, taken from a group of Wall Street Analysts, is 3.00, or a Hold.
Over the past six months, Fitbit Inc. insiders have been net sellers, acquiring a net of 8.59 million shares. This implies that insiders have been feeling relatively bullish about the outlook for FIT. Insider activity and sentiment signals are important to monitor because they can shed light on how “risky” a stock is perceived to be at it’s current valuation. Knowing this, it makes sense to look at beta, a measure of market risk. FIT has a beta of 1.03 and therefore an above average level of market volatility.
Century Aluminum Company (NASDAQ:CENX) operates in the Aluminum segment of the Basic Materials sector. CENX has increased sales at a -1.00% CAGR over the past five years, and is considered a low growth stock. The company has a net profit margin of -7.70% and is less profitable than the average Aluminum player. CENX’s asset turnover ratio is 1.22 and the company has financial leverage of 1.05. Company is therefore mostly financed by equity capital. CENX’s return on equity of -20.10% is worse than the Aluminum industry average.
The company trades at a free cash flow yield of 7.03. The average analyst recommendation for CENX is 2.70, or a Moderate Sell.
Century Aluminum Company insiders have bought a net of 1.06 million shares during the past three months, which implies that the company’s top executives have been feeling bullish about the stock’s outlook. Finally, CENX’s beta of 1.95 indicates that the stock has an above average level of market risk.
Century Aluminum Company (NASDAQ:CENX) scores higher than Fitbit Inc. (NYSE:FIT) on 6 of the 9 measures compared between the two companies. CENX has the better fundamentals, scoring higher on profitability and efficiency, leverage metrics. FIT has better insider activity and sentiment signals.
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May 04, 2020 at 08:30PM
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Dissecting the Investment Cases for Fitbit Inc. (FIT) and Century Aluminum Company (CENX) - Weekly Oracle
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