Critical Analysis: ATC Venture Group (OTCMKTS:ATCV) versus Smith & Wesson Brands (NASDAQ:SWBI)

ATC Venture Group (OTCMKTS:ATCV) and Smith & Wesson Brands (NASDAQ:SWBI) are both consumer discretionary companies, but which is the better stock? We will compare the two companies based on the strength of their profitability, analyst recommendations, dividends, institutional ownership, earnings, risk and valuation.

Analyst Recommendations

This is a breakdown of current ratings for ATC Venture Group and Smith & Wesson Brands, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
ATC Venture Group	0	0	0	0	0.00
Smith & Wesson Brands	0	2	1	0	2.33

Smith & Wesson Brands has a consensus target price of $11.00, indicating a potential upside of 10.11%. Given Smith & Wesson Brands’ stronger consensus rating and higher possible upside, analysts clearly believe Smith & Wesson Brands is more favorable than ATC Venture Group.

Volatility and Risk

ATC Venture Group has a beta of 7.9, meaning that its share price is 690% more volatile than the S&P 500. Comparatively, Smith & Wesson Brands has a beta of 1.11, meaning that its share price is 11% more volatile than the S&P 500.

Earnings and Valuation

This table compares ATC Venture Group and Smith & Wesson Brands”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
ATC Venture Group	N/A	N/A	N/A	N/A	N/A
Smith & Wesson Brands	$474.66 million	0.94	$13.43 million	$0.19	52.58

Smith & Wesson Brands has higher revenue and earnings than ATC Venture Group.

Profitability

This table compares ATC Venture Group and Smith & Wesson Brands’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
ATC Venture Group	N/A	N/A	N/A
Smith & Wesson Brands	1.89%	2.34%	1.53%

Institutional & Insider Ownership

59.3% of Smith & Wesson Brands shares are held by institutional investors. 49.9% of ATC Venture Group shares are held by company insiders. Comparatively, 1.6% of Smith & Wesson Brands shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Summary

Smith & Wesson Brands beats ATC Venture Group on 8 of the 10 factors compared between the two stocks.

About ATC Venture Group

ATC Venture Group Inc., through its subsidiary, Simonsen Iron Works Inc., engages in the design, manufacture, and assembly of an array of parts for original equipment manufacturers and other customers. The company was formerly known as Cycle Country Accessories Corp. and changed its name to ATC Venture Group Inc. in January 2012. ATC Venture Group Inc. was incorporated in 1906 and is based in Minnetonka, Minnesota.

About Smith & Wesson Brands

Smith & Wesson Brands, Inc. is a holding company, which engages in the manufacture, design, and provision of firearms. Its portfolio includes handguns, long guns, handcuffs, suppressor, and other firearm-related products. The firm’s brands are Smith & Wesson, M&P, Thompson/Center Arms, and Gemtech. The company was founded by Horace Smith and Daniel Baird Wesson in 1852 and is headquartered in Maryville, TN.