Inseego (INSG) versus Clearfield (CLFD) Critical Review

Inseego (NASDAQ: INSG) and Clearfield (NASDAQ:CLFD) are both small-cap computer and technology companies, but which is the better investment? We will contrast the two businesses based on the strength of their valuation, earnings, dividends, profitability, risk, institutional ownership and analyst recommendations.

Profitability

This table compares Inseego and Clearfield’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Inseego -30.71% N/A -24.17%
Clearfield 5.20% 5.95% 5.50%

Earnings and Valuation

This table compares Inseego and Clearfield’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Inseego $243.55 million 0.38 -$60.57 million ($1.22) -1.31
Clearfield $73.95 million 2.29 $3.84 million $0.28 43.75

Clearfield has lower revenue, but higher earnings than Inseego. Inseego is trading at a lower price-to-earnings ratio than Clearfield, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a breakdown of current ratings and price targets for Inseego and Clearfield, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Inseego 0 1 1 0 2.50
Clearfield 0 0 2 0 3.00

Inseego presently has a consensus target price of $1.88, indicating a potential upside of 17.19%. Clearfield has a consensus target price of $15.50, indicating a potential upside of 26.53%. Given Clearfield’s stronger consensus rating and higher probable upside, analysts clearly believe Clearfield is more favorable than Inseego.

Institutional and Insider Ownership

12.1% of Inseego shares are owned by institutional investors. Comparatively, 29.0% of Clearfield shares are owned by institutional investors. 4.1% of Inseego shares are owned by insiders. Comparatively, 18.3% of Clearfield shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Risk and Volatility

Inseego has a beta of 0.28, suggesting that its stock price is 72% less volatile than the S&P 500. Comparatively, Clearfield has a beta of 1.26, suggesting that its stock price is 26% more volatile than the S&P 500.

Summary

Clearfield beats Inseego on 13 of the 14 factors compared between the two stocks.

About Inseego

Novatel Wireless, Inc. is a provider of intelligent wireless solutions for the mobile communications market. The Company’s range of products includes intelligent mobile hotspots, universal serial bus (USB) modems, embedded modules, integrated asset-management and mobile tracking machine-to-machine (M2M) devices, communications and applications software and cloud services. It operates in the wireless communications industry in two product categories: M2M Products and Solutions, and Mobile Computing Solutions. M2M Products and Solutions includes its M2M embedded modules, integrated M2M communications devices, Ctrack fleet management platform and its service delivery platforms, Crossroads, DMS, the N4A DM and N4A CMS that provide device management and service enablement. Mobile Computing Solutions includes its MiFi brand of intelligent mobile hotspot devices, USB modems and embedded modules that enable Internet access and data transmission and services via cellular wireless networks.

About Clearfield

Clearfield, Inc. manufactures, markets and sells fiber management and enclosure platform that consolidates, distributes and protects fiber as it moves from the inside plant to the outside plant and all the way to the home, business and cell site. The Company’s products include Clearview Cassette, which is the building block of its product platform; Connectivity and Optical Components; FieldSmart, which is a series of panels, cabinets, wall boxes and other enclosures that house the Clearview components; FieldShield, which is a fiber delivery method for broadband deployment; CraftSmart, which is a line of optical protection field enclosures, and Cable Assemblies. Its products are sold across broadband service providers, including traditional telephone companies, competitive local exchange carriers, multiple service operators (cable television), wireless service providers, and municipal-owned utilities that utilize fiber in their service offerings to businesses and consumers.

Receive News & Ratings for Inseego Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for Inseego and related companies with MarketBeat.com's FREE daily email newsletter.

Leave a Reply