Head to Head Survey: Fabrinet (NYSE:FN) & Surge Component (OTCMKTS:SPRS)

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Fabrinet	9.94%	19.83%	13.41%
Surge Component	2.80%	4.98%	3.87%

Institutional and Insider Ownership

97.4% of Fabrinet shares are held by institutional investors. 0.2% of Fabrinet shares are held by insiders. Comparatively, 56.0% of Surge Component shares are held by 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 Fabrinet and Surge Component”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Fabrinet	$3.42 billion	7.38	$332.53 million	$11.64	60.52
Surge Component	$36.32 million	0.58	$1.14 million	$0.18	20.22

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

Analyst Recommendations

This is a breakdown of recent ratings and price targets for Fabrinet and Surge Component, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Fabrinet	0	3	6	1	2.80
Surge Component	0	0	0	0	0.00

Fabrinet currently has a consensus price target of $661.75, suggesting a potential downside of 6.06%. Given Fabrinet’s stronger consensus rating and higher probable upside, equities research analysts clearly believe Fabrinet is more favorable than Surge Component.

Volatility & Risk

Fabrinet has a beta of 1.17, meaning that its share price is 17% more volatile than the S&P 500. Comparatively, Surge Component has a beta of 0.33, meaning that its share price is 67% less volatile than the S&P 500.

Summary

Fabrinet beats Surge Component on 14 of the 15 factors compared between the two stocks.

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 Grand Cayman, the Cayman Islands.

About Surge Component

Surge Components, Inc., together with its subsidiaries, supplies electronic products and components. It offers capacitors, which are electrical energy storage devices; and discrete semiconductor components, such as rectifiers, transistors, diodes, circuit protection devices, and audible components comprising audible transducers, Piezo buzzers, speakers, and microphones. The company also provides resonators, alarms, chimes, filters, and discriminators, as well as fuses, printed circuit boards, and switches. Its products are used in the electronic circuitry of various industries, including automotive, computer, communications, cellular telephones, consumer electronics, garage door openers, security equipment, audio equipment, telecom products, computer related products, power supply products, utility meters, and household appliances. The company sells its products to original equipment manufacturers and distributors through independent sales representatives or organizations in Canada, China, other Asian countries, South America, and Europe. Surge Components, Inc. was incorporated in 1981 and is headquartered in Deer Park, New York.