LMI Aerospace (NASDAQ: LMIA) and Acorn Energy (OTCMKTS:ACFN) are both small-cap aerospace companies, but which is the superior investment? We will contrast the two companies based on the strength of their valuation, analyst recommendations, risk, profitabiliy, earnings, institutional ownership and dividends.

Volatility and Risk

LMI Aerospace has a beta of 1.23, suggesting that its share price is 23% more volatile than the S&P 500. Comparatively, Acorn Energy has a beta of 2.6, suggesting that its share price is 160% more volatile than the S&P 500.

Insider & Institutional Ownership

57.3% of LMI Aerospace shares are owned by institutional investors. 17.5% of LMI Aerospace shares are owned by insiders. Comparatively, 14.3% of Acorn Energy shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Analyst Recommendations

This is a summary of current ratings and price targets for LMI Aerospace and Acorn Energy, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
LMI Aerospace 0 2 0 0 2.00
Acorn Energy 0 0 0 0 N/A

LMI Aerospace currently has a consensus price target of $9.00, indicating a potential downside of 35.53%. Given LMI Aerospace’s higher probable upside, research analysts clearly believe LMI Aerospace is more favorable than Acorn Energy.

Profitability

This table compares LMI Aerospace and Acorn Energy’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
LMI Aerospace -11.62% -5.84% -1.29%
Acorn Energy 58.04% 282.25% 56.04%

Earnings and Valuation

This table compares LMI Aerospace and Acorn Energy’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
LMI Aerospace $342.67 million 0.55 $31.10 million ($3.04) -4.59
Acorn Energy $4.99 million 1.47 -$2.11 million N/A N/A

LMI Aerospace has higher revenue and earnings than Acorn Energy.

About LMI Aerospace

LMI Aerospace, Inc. is a supplier of structural assemblies, kits and components, and design engineering services to the aerospace and defense markets. The Company operates in two business segments consisting of its Aerostructures segment and its Engineering Services segment. Its Aerostructures segment fabricates, machines, finishes, integrates, assembles and kits machined and formed close tolerance aluminum, specialty alloy and composite components and higher level assemblies for use by the aerospace and defense industries. Its Engineering Services segment provides a range of design, engineering and program management services, supporting aircraft product lifecycles from conceptual design, analysis and certification through production support, fleet support and service life extensions through an engineering solution to original equipment manufacturers (OEMs) and Tier 1 aerospace suppliers, and airline operators.

About Acorn Energy

Acorn Energy, Inc. is a holding company that focuses on technology driven solutions for energy infrastructure asset management. The Company’s segments include Energy & Security Sonar Solutions (DSIT), Smart Grid Distribution Automation (GridSense) and Machine-to-Machine Critical Asset Monitoring & Control (M2M). The DSIT segment provides sonar and acoustic related solutions for energy, defense and commercial markets with a focus on underwater site security for strategic energy installations and other sonar and acoustic systems. The GridSense segment includes products and services that are provided by GridSense Inc. (GridSense), which develops markets and sells remote monitoring and control systems to electric utilities and industrial facilities across the world. The M2M segment includes products and services that are provided by OmniMetrix, LLC (OmniMetrix). OmniMetrix offers over two primary product lines, such as the Hero Rectifier Monitor and the Patriot Automated Test Stations.

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