Valuing 2 Stocks Using Ratios and Multiples: Facebook Inc. (FB), McDermott International Inc. (MDR)

You should consider shares of Facebook Inc. (NASDAQ:FB) and McDermott International Inc. (NYSE:MDR) if you are looking for a great stocks to invest in. Starting with the FB shares, which traded at $198.82 at the close of the recent session, dropping -0.44%. On Tuesday, the company’s shares shed -$0.88 from its value which represented in intraday trading. The stock is now 41.40% higher in year-to-date (YTD) trading. FB’s intraday high was $198.93 while its lowest price touched $195.08. The stock’s 52-week high price is $208.66, which means the current price is at -4.72%. In terms of trading activity, the daily trading volume fell to 11595288 against 200-day average trading volume of 15,550,925 shares.

What are analyst forecasts for Facebook Inc. (NASDAQ:FB)?

At a consensus rating of 4.60, FB is trending as a streaking Strong Buy, as it has been the case a month ago when 31 analysts called it a Strong Buy. Two months ago, 35 analysts recommended, on average, that FB stock is a Strong Buy. The Technology company’s shares’ overall bearish trend saw it close higher on Tuesday compared to its opening price of $197.60 on the day.

Forecasts for Facebook Inc. (NASDAQ:FB) give the stock a fair value for the growth of 17.16% from its last price. The 12-month price forecast for the stock by analysts puts the stock’s mean price target at $240.00, which means the price per share could rise by nearly $41.18. The price range target is between a low of $120.00 and a high of $330.00. The stock would need to gain by about $39.75 to hit the estimated high or 0.62% from its 12-month low.

The consensus among 50 analysts is that it is a good time for one to Buy in the Facebook Inc. 41 analysts rate FB as a Buy, with 1 of 50 analysts rate it as a Sell. 3 have valued the stock as Overweight and 5 have recommended that investors Hold.

Facebook Inc. (NASDAQ:FB) Upgrades and Downgrades

In terms of rating changes, Piper Jaffray on December 03, 2019, Initiated Facebook Inc. (FB) at Overweight. Analysts at Daiwa Securities have assigned a Buy rating for the stock in their research note on November 05, 2019 with an estimated price target of $250. Moreover, RBC Capital Mkts analysts issued a rating of Outperform for the stock on October 31, 2019, giving it a price target of $270 for the next 12 months. On October 28, 2019, the stock earned a Hold rating due to an analyst call from Stifel, while analysts from MKM Partners on August 02, 2019 suggested that the stock is Buy.

McDermott International Inc. (NYSE:MDR) adds -$0.06 on Tuesday

The MDR stock has tanked -87.42% year-to-date and is currently trading at $0.82, which is -92.51% below its 52-week high. The company shares lost -6.49% on the day and have risen nearly 55.26% off a low hit. At current levels, McDermott International Inc. has a valuation of about $8.54B. As of 12/03/19, this stock has risen 1.82% during the week and closed at $0.88 in the previous session. However, recent McDermott International Inc. stock performance shows that MDR shares are -50.72% down over the last month, and -82.96% down for the last three months.

Earnings per share (EPS) estimates for the current quarter are $0.17, with the trailing 12-month share earnings at -$26.97. The ratio is expected to be down by -125.30% for the current year 2019 and 134.50% for next year. Over the next 5-year period, earnings per share will be 51.50%. But will the MDR stock surprise in the current quarter results, where the -$1.8 actual EPS reported on 9/29/2019 surprised by -190.30% or was lower by -$1.18 from the estimated -$0.62.

Sales Growth to climb 16.80% for the year

How well will McDermott International Inc. perform as a business over the current quarter, year and next 5-year period? Compared to the year-ago quarter, analysts forecast the company to bring in between $2.87B and $2.87B in current quarter sales. The consensus estimated for the current quarter is $2.87B from sales. Forecasts for this fiscal year are between $9.37B and $9.52B and the consensus estimate for sales is at $9.45B. MDR has its next quarter sales estimates at between $2.56B and $2.56B, with the quarter-over-quarter growth estimates at 15.60% and the annual growth forecast for the year at 16.80%.

Who owns shares in McDermott International Inc. (MDR)?

Let’s briefly focus on the share ownership of the McDermott International Inc. (NYSE:MDR) stock, where we find that 88.78% of shares are held by institutions. Blackrock Inc. tops the list of institutional owners as it is holding 27.65 million shares or 15.20% of shares outstanding. Vanguard Group, Inc. (The) and Luminus Management, LLC held 18.77 million and 8.58 million representing 10.32% and 4.72% respectively at the close of the last trading session. As of Sep 29, 2019, Dimensional Fund Advisors LP accounted for 7.05 million shares at over 14.25 million. This represented 3.88% of shares outstanding. State Street Corporation held 6.69 million shares at over 13.51 million representing 3.68% of shares outstanding.

MDR Insider Activity

Insider activity can also give a signal in terms of price direction. Looking at McDermott International Inc. (MDR), a total of 4500 shares have been sold by insiders over the last 6 months while 3896801 shares were added in the same time span. On 11/15/2019, by the name Chatterjee Management Co sold 2.27 million shares worth $13.6 million at the price of $6.00 per share. Filings also show that Chatterjee Management Co sold a total of 794200.0 shares on 11/15/2019 valued at $6.4 million. Since the last insider activity, the company’s share price has climbed 28.65%.