Analyzing Immersion (NASDAQ:IMMR) & Abercrombie & Fitch (NYSE:ANF)

Abercrombie & Fitch (NYSE:ANF) and Immersion (NASDAQ:IMMR) are both consumer discretionary companies, but which is the superior investment? We will compare the two businesses based on the strength of their dividends, risk, analyst recommendations, earnings, valuation, profitability and institutional ownership.

Institutional & Insider Ownership

60.6% of Immersion shares are held by institutional investors. 2.3% of Abercrombie & Fitch shares are held by company insiders. Comparatively, 10.6% of Immersion shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Earnings and Valuation

This table compares Abercrombie & Fitch and Immersion”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Abercrombie & Fitch	$5.27 billion	1.30	$506.92 million	$11.68	13.82
Immersion	$1.73 billion	0.14	$4.52 million	$0.34	21.12

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

Profitability

This table compares Abercrombie & Fitch and Immersion’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Abercrombie & Fitch	10.03%	33.52%	13.05%
Immersion	0.60%	1.83%	0.82%

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for Abercrombie & Fitch and Immersion, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Abercrombie & Fitch	0	5	9	2	2.81
Immersion	0	2	1	0	2.33

Abercrombie & Fitch currently has a consensus target price of $157.21, suggesting a potential downside of 2.61%. Immersion has a consensus target price of $13.50, suggesting a potential upside of 88.02%. Given Immersion’s higher possible upside, analysts clearly believe Immersion is more favorable than Abercrombie & Fitch.

Volatility & Risk

Abercrombie & Fitch has a beta of 1.02, suggesting that its stock price is 2% more volatile than the S&P 500. Comparatively, Immersion has a beta of 1.01, suggesting that its stock price is 1% more volatile than the S&P 500.

Summary

Abercrombie & Fitch beats Immersion on 11 of the 15 factors compared between the two stocks.

About Abercrombie & Fitch

Abercrombie & Fitch Co. engages in the retail of apparel, personal care products, and accessories. The firm operates through following geographical segments: Americas, EMEA and APAC. The Americas segment includes operations in North America and South America. The EMEA segment includes operations in Europe, the Middle East and Africa. The APAC segment includes operations in the Asia-Pacific region, including Asia and Oceania. The company was founded by David Abercrombie in 1892 and is headquartered in New Albany, OH.

About Immersion

Immersion Corporation, together with its subsidiaries, engages in the creation, design, development, and licensing of haptic technologies that allow people to use their sense of touch to engage with and experience various digital products in North America, Europe, and Asia. The company provides technology, patent, and combined licenses. It serves markets, including mobility, gaming, automotive, virtual and augmented reality, and wearables, as well as residential, commercial, and industrial Internet of Things. The company was incorporated in 1993 and is headquartered in Aventura, Florida.