Signal Genetics (NASDAQ: MGEN) and BG Medicine (OTCMKTS:BGMD) are both small-cap medical companies, but which is the superior investment? We will compare the two businesses based on the strength of their analyst recommendations, earnings, institutional ownership, dividends, profitability, risk and valuation.

Risk & Volatility

Signal Genetics has a beta of 1.93, meaning that its share price is 93% more volatile than the S&P 500. Comparatively, BG Medicine has a beta of 1.81, meaning that its share price is 81% more volatile than the S&P 500.

Profitability

This table compares Signal Genetics and BG Medicine’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Signal Genetics -720.38% -80.31% -64.59%
BG Medicine N/A N/A N/A

Insider and Institutional Ownership

21.3% of Signal Genetics shares are held by institutional investors. 44.4% of Signal Genetics shares are held by insiders. Comparatively, 6.5% of BG Medicine shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Analyst Ratings

This is a summary of current recommendations for Signal Genetics and BG Medicine, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Signal Genetics 0 0 3 0 3.00
BG Medicine 0 0 0 0 N/A

Signal Genetics presently has a consensus target price of $23.00, indicating a potential upside of 224.40%. Given Signal Genetics’ higher possible upside, research analysts clearly believe Signal Genetics is more favorable than BG Medicine.

Earnings and Valuation

This table compares Signal Genetics and BG Medicine’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Signal Genetics $3.34 million 47.36 -$12.67 million ($8.93) -0.79
BG Medicine $1.57 million 0.31 -$5.30 million N/A N/A

BG Medicine has higher revenue, but lower earnings than Signal Genetics.

Summary

Signal Genetics beats BG Medicine on 7 of the 11 factors compared between the two stocks.

About Signal Genetics

Signal Genetics, Inc. is a commercial stage, molecular genetic diagnostic company. The Company is focused on providing diagnostic services that help physicians to make decisions concerning the care of cancer patients. The Company’s diagnostic service is the Myeloma Prognostic Risk Signature (MyPRS) test. The MyPRS test is a microarray-based gene expression profile (GEP), assay that measures the expression level of specific genes and groups of genes that are designed to predict an individual’s long-term clinical outcome/prognosis, giving a basis for personalized treatment options. The Company’s MyPRS test provides a whole-genomic expression profile of a patient’s multiple myeloma (MM). The Company offers MyPRS test in its laboratory located in Little Rock, Arkansas. The Company is licensed to sell its test in all 50 states.

About BG Medicine

BG Medicine, Inc. (BG Medicine) is a commercial-stage diagnostics company. The Company is engaged in commercializing diagnostic products that may be used to help guide the care and management of patients suffering from heart failure and related disorders. The Company’s BGM Galectin-3 Test is an in vitro diagnostic device that employs a manual micro-titer platform to measure galectin-3 levels in blood plasma or serum for use as an aid in assessing the prognosis of chronic heart failure in conjunction with clinical evaluation. The automated galectin-3 tests are being developed and commercialized by its diagnostic instrument manufacturing partners and will be performed on its partners’ automated platforms. The Company’s CardioSCORE test is a multi-analyte biomarker-based blood test that was designed as an aid in the assessment of near-term risk for atherothrombotic cardiovascular events, such as heart attack and ischemic stroke.

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