Contrasting Fabrinet (NYSE:FN) and Sunworks (SUNW)

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Sunworks (NASDAQ:SUNW) and Fabrinet (NYSE:FN) are both small-cap oils/energy companies, but which is the better business? We will compare the two businesses based on the strength of their risk, analyst recommendations, dividends, institutional ownership, profitability, valuation and earnings.

Insider and Institutional Ownership

7.6% of Sunworks shares are held by institutional investors. Comparatively, 99.5% of Fabrinet shares are held by institutional investors. 1.9% of Sunworks shares are held by company insiders. Comparatively, 3.3% of Fabrinet shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Risk & Volatility

Sunworks has a beta of 1.26, indicating that its share price is 26% more volatile than the S&P 500. Comparatively, Fabrinet has a beta of 0.58, indicating that its share price is 42% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Sunworks and Fabrinet, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Sunworks 0 1 0 0 2.00
Fabrinet 0 3 3 0 2.50

Fabrinet has a consensus price target of $45.33, suggesting a potential upside of 2.31%. Given Fabrinet’s stronger consensus rating and higher probable upside, analysts clearly believe Fabrinet is more favorable than Sunworks.

Valuation and Earnings

This table compares Sunworks and Fabrinet’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Sunworks $77.45 million 0.13 -$7.22 million ($0.32) -1.22
Fabrinet $1.37 billion 1.18 $84.16 million $2.98 14.87

Fabrinet has higher revenue and earnings than Sunworks. Sunworks is trading at a lower price-to-earnings ratio than Fabrinet, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Sunworks and Fabrinet’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Sunworks -12.46% -56.59% -22.48%
Fabrinet 6.14% 12.68% 8.72%

Summary

Fabrinet beats Sunworks on 13 of the 14 factors compared between the two stocks.

Sunworks Company Profile

Sunworks, Inc., through its subsidiaries, provides photo voltaic based power systems for the agricultural, commercial, industrial, and residential markets in California, Nevada, Oregon, and Washington, the United States. The company also designs, arranges, finances, integrates, installs, and manages systems ranging in size from 2 kilowatt for residential loads to multi megawatt systems for larger commercial projects. In addition, it offers a range of installation services, including design, system engineering, procurement, permitting, construction, grid connection, warranty, system monitoring, and maintenance services to its solar energy customers. The company was formerly known as Solar3D, Inc. and changed its name to Sunworks, Inc. in March 2016. Sunworks, Inc. was founded in 2002 and is headquartered in Roseville, California.

Fabrinet Company Profile

Fabrinet provides optical packaging and precision optical, electro-mechanical, and electronic manufacturing services in North America, the Asia-Pacific, and Europe. The company offers a range of optical and electro-mechanical capabilities in the manufacturing process, including process design and engineering, supply chain management, manufacturing, printed circuit board assembly, packaging, integration, final assembly, and test. Its products comprise switching products, such as reconfigurable optical add-drop multiplexers, optical amplifiers, modulators, and other optical components and modules that enable network managers to route voice, video, and data communications traffic through fiber optic cables at various wavelengths and speeds, and over various distances; tunable lasers, transceivers, and transponders; and active optical cables, which provide high-speed interconnect capabilities for data centers and computing clusters, as well as for Infiniband, Ethernet, fiber channel, and optical backplane connectivity. The company also offers solid state, diode-pumped, gas, and fiber lasers used in semiconductor processing, biotechnology and medical device, metrology, and material processing industries; and differential pressure, micro-gyro, fuel, and other sensors used in automobiles, as well as non-contact temperature measurement sensors for the medical industry. In addition, it designs and fabricates application-specific crystals, lenses, prisms, mirrors, and laser components and substrates, as well as other custom and standard borosilicate, clear fused quartz, and synthetic fused silica glass products. The company serves original equipment manufacturers of optical communication components, modules and sub-systems, industrial lasers, medical devices, and sensors. Fabrinet was incorporated in 1999 and is based in George Town, the Cayman Islands.

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