What Are These 2 Stocks Telling Us? – Hewlett Packard Enterprise Company (HPE), Ovintiv Inc. (OVV)

Hewlett Packard Enterprise Company (NYSE: HPE) shares are -39.03% down in the year-to-date (YTD) period and have moved 3.64% or $0.34 higher in the latest trading session. However, stock’s trailing 12-month performance remains nearly +30.15% lower. Comparatively, the stock is -40.23% down YTD and 0.83% over the trailing 3-month period. If we look at the shorter duration, its week performance is 2.65% and 2.00% over the month.

Analyst Recommendations

On May 26, 2020, JP Morgan recommended the HPE stock is a Neutral, while earlier, Argus had Downgrade the stock as a Hold on May 27, 2020. 22 analysts offering the recommendations for the stock have a consensus rating of 2.80 to suggest that the HPE stock is a “Moderate Buy. 2 of the 22 analysts rate the stock as a “Sell”, while 0 has rated it as “Underweight”. 5 recommend buying, with 1 rating it as an Overweight.

The stock currently trades at $9.67 and analysts tracking its performance over the next 12 months have a consensus estimate price target of $10.97. The forecasts give the Hewlett Packard Enterprise Company stock a price target range of $15.00 on the higher side while at least one analyst think the stock could plunge to a low of $8.50. The two limits represent an upside potential of 35.53% or -13.76%.

Earnings Forecast

Analysts estimate the earnings to increase 39.10% in the current quarter to $0.33, down from the $0.49 reported in the same quarter a year ago. For the current year, earnings should grow to an average of $1.3, down -9.00% from $1.77 reported last year. Analysts also offered guidance for the next financial quarter, with their average projected EPS at between $0.23 and $0.39. Wall Street estimates earnings per share to be at an average of $1.47 for the next year.

Insider Transactions Summary

According to SEC data, total insider shares purchases at the company stands at 63 over the last 12 months, while SEC filings reveal that there have been 45 insider sales over the same period. Insiders have purchases 2,733,196 shares while those sold by company executives and officers stand at 1,359,421. The last 3 months have seen insiders trade a total of 2,569 and 0 in purchases and sales respectively.

Ricci Jeff T, a SVP, Controller & PAO at the company, sold 9,255 shares worth $0.15 million at $15.90 per share on Dec 12. The CSO, Pres Hybrid IT had earlier sold another 16,884 HPE shares valued at $0.25 million on Jan 28. The shares were sold at $14.61 per share. Karros Kirt P (SVP, Finance & Treasurer) sold 9,255 shares at $16.00 per share on Dec 12 for a total of $0.15 million while Melkote Keerti, (President Intelligent Edge) sold 66,130 shares on Dec 12 for $1.06 million with each share fetching $15.97.

Ovintiv Inc. (NYSE:OVV), on the other hand, is trading around $11.23 with a market cap of $3.02B and analyst research firms have a negative stance on its shares. Analysts predict that the stock will reach $16.18 and spell out a more modest performance – a 30.59% return. Some analysts are even forecasting -$0.43 per share in earnings this year on a short term (1 year) basis.

Let us briefly look at the Ovintiv Inc. (OVV) financials, with a focus on its operating details as indicated in its earnings report for the last quarter.

Company balance sheet and cash flow

OVV’s operating margin was positive on the trailing 12 months basis, remaining steady at 19.50%, while the operating expenses over the recent quarter were at $3.92 billion. This represented a -439.53% of the company’s total revenues which amounted $726.0 million. With this in place, we can see that the company’s diluted EPS declined -$16.87 on the year-over-year period, growing to $1.22 as given in the last earnings report.

In terms of the balance sheet & cash flow as of (Sep 2020), the total assets figure advanced to $16.8 billion from $21.5 billion over the previous quarter. The cash flow from operating activities totaled $683.0 million, significantly lower than the $1.44 billion reported in the year-ago quarter. The company’s free cash flow for the quarter was -$359.0 million.

Insider activity

Insiders have transacted a total of 58 times at Ovintiv Inc. over the last 6 months, with insider purchases undertaken 42 times and accounting for 476,038 shares. Insider sales totaled 254,403 shares over the same period, with these deals completed in 16 transactions. Looking at these numbers, we realize that net purchases over that period are 26.0 shares.

Major holders

Insiders own 0.10% of the company shares, while shares held by institutions stand at 73.40% with a share float percentage of 256.54M. Investors are also buoyed by the number of investors in a company, with Ovintiv Inc. having a total of 0 institutions that hold shares in the company.