What Are These 2 Stocks Telling Us? – II-VI Incorporated (IIVI), Apache Corporation (APA)

II-VI Incorporated (NASDAQ: IIVI) shares are 30.38% up in the year-to-date (YTD) period and have moved 4.37% or $1.84 higher in the latest trading session. However, stock’s trailing 12-month performance remains nearly +131.05% lower. Comparatively, the stock is -17.12% down YTD and -5.55% over the trailing 3-month period. If we look at the shorter duration, its week performance is 0.48% and -5.92% over the month.

Analyst Recommendations

On July 23, 2020, Loop Capital recommended the IIVI stock is a Buy, while earlier, Northland Capital had Downgrade the stock as a Market Perform on August 14, 2020. 16 analysts offering the recommendations for the stock have a consensus rating of 2.20 to suggest that the IIVI stock is a “Moderate Buy. 0 of the 16 analysts rate the stock as a “Sell”, while 0 has rated it as “Underweight”. 11 recommend buying, with 0 rating it as an Overweight.

The stock currently trades at $43.90 and analysts tracking its performance over the next 12 months have a consensus estimate price target of $55.96. The forecasts give the II-VI Incorporated stock a price target range of $67.00 on the higher side while at least one analyst think the stock could plunge to a low of $43.00. The two limits represent an upside potential of 34.48% or -2.09%.

Earnings Forecast

Analysts estimate the earnings to increase 53.20% in the current quarter to $0.55, down from the $0.57 reported in the same quarter a year ago. For the current year, earnings should grow to an average of $2.58, up 26.40% from $2.85 reported last year. Analysts also offered guidance for the next financial quarter, with their average projected EPS at between $0.49 and $0.85. Wall Street estimates earnings per share to be at an average of $3.26 for the next year.

Insider Transactions Summary

According to SEC data, total insider shares purchases at the company stands at 40 over the last 12 months, while SEC filings reveal that there have been 42 insider sales over the same period. Insiders have purchases 475,564 shares while those sold by company executives and officers stand at 336,963. The last 3 months have seen insiders trade a total of 157,672 and 103,615 in purchases and sales respectively.

RAYMOND MARY JANE, a Chief Financial Officer at the company, sold 2,000 shares worth $0.1 million at $52.00 per share on Aug 03. The Director had earlier sold another 14,500 IIVI shares valued at $0.76 million on Aug 05. The shares were sold at $52.53 per share. KRAMER FRANCIS J (Director) sold 14,500 shares at $50.04 per share on Jun 18 for a total of $0.73 million while KRAMER FRANCIS J, (Director) sold 14,500 shares on Jun 15 for $0.69 million with each share fetching $47.63.

Apache Corporation (NASDAQ:APA), on the other hand, is trading around $14.08 with a market cap of $5.49B and analyst research firms have a negative stance on its shares. Analysts predict that the stock will reach $16.48 and spell out a more modest performance – a 14.56% return. Some analysts are even forecasting -$1.43 per share in earnings this year on a short term (1 year) basis.

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

Company balance sheet and cash flow

APA’s operating expenses over the recent quarter were at -$416.0 million. This represented a 169.8% of the company’s total revenues which amounted $596.0 million. With this in place, we can see that the company’s diluted EPS declined -$1.00 on the year-over-year period, shrinking to -$0.84 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 $13.0 billion from $13.39 billion over the previous quarter. The cash flow from operating activities totaled $586.0 million, significantly lower than the $1.45 billion reported in the year-ago quarter. The company’s free cash flow for the quarter was -$280.0 million.

Insider activity

Insiders have transacted a total of 9 times at Apache Corporation over the last 6 months, with insider purchases undertaken 5 times and accounting for 78,156 shares. Insider sales totaled 37,850 shares over the same period, with these deals completed in 4 transactions. Looking at these numbers, we realize that net purchases over that period are 1.0 shares. Insiders now hold a total of 1.73M shares after the latest sales, with 10.00% net shares purchased.

Major holders

Insiders own 0.10% of the company shares, while shares held by institutions stand at 88.80% with a share float percentage of 376.48M. Investors are also buoyed by the number of investors in a company, with Apache Corporation having a total of 767 institutions that hold shares in the company. The top two institutional holders are Dodge & Cox Inc with over 54.28 million shares worth more than $732.71 million. As of Jun 29, 2020, Dodge & Cox Inc held 14.38% of shares outstanding.

The other major institutional holder is Vanguard Group, Inc. (The), with the investment firm holding over 43.8 million shares as of Jun 29, 2020. The firm’s total holdings are worth over $591.35 million and represent 11.61% of shares outstanding.