Critical Review: Hurco Companies (NASDAQ:HURC) versus Eastern (NASDAQ:EML)

Hurco Companies (NASDAQ:HURC) and Eastern (NASDAQ:EML) are both small-cap industrials companies, but which is the superior investment? We will contrast the two companies based on the strength of their earnings, profitability, analyst recommendations, dividends, institutional ownership, valuation and risk.

Analyst Ratings

This is a breakdown of recent ratings and price targets for Hurco Companies and Eastern, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Hurco Companies	1	0	0	0	1.00
Eastern	0	2	0	0	2.00

Volatility and Risk

Hurco Companies has a beta of 0.7, indicating that its share price is 30% less volatile than the S&P 500. Comparatively, Eastern has a beta of 0.87, indicating that its share price is 13% less volatile than the S&P 500.

Institutional and Insider Ownership

74.4% of Hurco Companies shares are held by institutional investors. Comparatively, 77.0% of Eastern shares are held by institutional investors. 9.9% of Hurco Companies shares are held by insiders. Comparatively, 18.4% of Eastern shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Profitability

This table compares Hurco Companies and Eastern’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Hurco Companies	-3.58%	-3.37%	-2.51%
Eastern	3.44%	3.38%	1.89%

Valuation and Earnings

This table compares Hurco Companies and Eastern”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Hurco Companies	$178.55 million	0.79	-$15.12 million	($1.03)	-21.16
Eastern	$248.97 million	0.59	$7.13 million	$1.34	18.27

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

Summary

Eastern beats Hurco Companies on 11 of the 12 factors compared between the two stocks.

About Hurco Companies

Hurco Companies, Inc., an industrial technology company, designs, manufactures, and sells computerized machine tools to companies in the metal cutting industry worldwide. Its principal products include general-purpose computerized machine tools, including vertical and horizontal machining centers, turning centers, and toolroom machines. The company also provides computer control systems and related software for press brake applications. In addition, it offers machine tool components, automation integration equipment, and solutions for job shops; and software options, control upgrades, and accessories and replacement parts for its products, as well as customer service, training, and applications support services. Further, the company provides Autobend computer control systems for press brake machines. It serves independent job shops and specialized short-run production applications within large manufacturing operations, as well as precision tool, die, and mold manufacturers in aerospace, defense, medical equipment, energy, automotive/transportation, electronics, and computer industries. The company sells its products under the Hurco, Milltronics, and Takumi brands through independent agents and distributors, as well as through its direct sales and service organizations. Hurco Companies, Inc. was incorporated in 1968 and is headquartered in Indianapolis, Indiana.

About Eastern

The Eastern Company designs, manufactures, and sells engineered solutions to industrial markets in the United States and internationally. The company offers turnkey returnable packaging solutions, which are used in the assembly processes of vehicles, aircraft, and durable goods, as well as in production processes of plastic packaging products, packaged consumer goods, and pharmaceuticals; designs and manufactures blow mold tools and injection blow mold tooling products, and 2-step stretch blow molds and related components for the stretch blow molding industry; and supplies blow molds and change parts to the food, beverage, healthcare, and chemical industries. It also provides rotary latches, compression latches, draw latches, hinges, camlocks, key switches, padlocks, and handles; and development and program management services for custom electromechanical and mechanical systems for original equipment manufacturers (OEMs) and customer applications. In addition, the company designs and manufactures proprietary vision technology for OEMs and aftermarket applications, as well as offers aftermarket components to the heavy- and medium-duty truck, motorhome, and bus markets. The Eastern Company was founded in 1858 and is based in Shelton, Connecticut.