Critical Review: AAP (OTCMKTS:AAPJ) versus Fabrinet (NYSE:FN)


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AAP (OTCMKTS:AAPJ) and Fabrinet (NYSE:FN) are both computer and technology companies, but which is the superior stock? We will contrast the two companies based on the strength of their risk, analyst recommendations, valuation, profitability, dividends, institutional ownership and earnings.

Earnings and Valuation

This table compares AAP and Fabrinet’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
AAP N/A N/A N/A N/A N/A
Fabrinet $1.64 billion 1.91 $113.48 million $3.14 27.05

Fabrinet has higher revenue and earnings than AAP.

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for AAP and Fabrinet, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
AAP 0 0 0 0 N/A
Fabrinet 0 4 5 0 2.56

Fabrinet has a consensus price target of $70.33, suggesting a potential downside of 17.20%. Given Fabrinet’s higher possible upside, analysts plainly believe Fabrinet is more favorable than AAP.

Profitability

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

Net Margins Return on Equity Return on Assets
AAP N/A N/A N/A
Fabrinet 7.18% 13.37% 9.41%

Risk and Volatility

AAP has a beta of 0.37, indicating that its share price is 63% less volatile than the S&P 500. Comparatively, Fabrinet has a beta of 1.01, indicating that its share price is 1% more volatile than the S&P 500.

Insider and Institutional Ownership

94.5% of Fabrinet shares are owned by institutional investors. 4.5% of AAP shares are owned by insiders. Comparatively, 0.7% of Fabrinet shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Summary

Fabrinet beats AAP on 8 of the 9 factors compared between the two stocks.

About AAP

AAP, Inc. provides power, comfort, and control systems for motor coaches, trucks, specialty vehicles, trailers, and other applications worldwide. The company offers air conditioning/heating systems, HVAC accessories, inverters and battery chargers, air purifiers, sound attenuating foams, refrigerators/freezers, icemakers, coolers, automatic computerized voltage disconnect systems, DC electrical systems, electrical start assist devices, and power transfer switches. It serves communication, medical, fire, rescue, race car transporter, recreational vehicle, trucking, and luxury motor coach and special purpose vehicle industries. The company offers its products under the AAP Inc., Dometic, and Vitrifrigo America brands. The company was formerly known as Borneo Energy USA, Inc. and changed its name to AAP, Inc. in September 2011. AAP, Inc. was founded in 1980 and is based in Milford, Virginia.

About Fabrinet

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 advanced optical and electro-mechanical capabilities in the manufacturing process, including process design and engineering, supply chain management, manufacturing, printed circuit board assembly, advanced packaging, integration, final assembly, and testing. Its products include switching products, including 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, speeds, and over various distances. The company's products also comprise tunable lasers, transceivers, and transponders; and active optical cables, which provide high-speed interconnect capabilities for data centers and computing clusters, as well as Infiniband, Ethernet, fiber channel, and optical backplane connectivity. In addition, it provides 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. Further, the company designs and fabricates application-specific crystals, lenses, prisms, mirrors, laser components, and substrates; and other custom and standard borosilicate, clear fused quartz, and synthetic fused silica glass products. It serves original equipment manufacturers of optical communication components, modules and sub-systems, industrial lasers, automotive components, medical devices, and sensors. The company was incorporated in 1999 and is based in George Town, the Cayman Islands.

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