Baltic International USA (OTCMKTS:BISA) and Stellus Capital Investment (NYSE:SCM) Critical Analysis

Stellus Capital Investment (NYSE:SCM) and Baltic International USA (OTCMKTS:BISA) are both small-cap finance companies, but which is the superior investment? We will contrast the two businesses based on the strength of their institutional ownership, dividends, profitability, risk, valuation, earnings and analyst recommendations.

Risk and Volatility

Stellus Capital Investment has a beta of 0.66, meaning that its stock price is 34% less volatile than the S&P 500. Comparatively, Baltic International USA has a beta of -1.47, meaning that its stock price is 247% less volatile than the S&P 500.

Insider and Institutional Ownership

13.2% of Stellus Capital Investment shares are owned by institutional investors. 4.0% of Stellus Capital Investment shares are owned by company insiders. Comparatively, 29.4% of Baltic International USA shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Profitability

This table compares Stellus Capital Investment and Baltic International USA’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Stellus Capital Investment	29.77%	10.72%	3.95%
Baltic International USA	N/A	N/A	-806.45%

Analyst Recommendations

This is a summary of recent ratings for Stellus Capital Investment and Baltic International USA, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Stellus Capital Investment	0	3	0	0	2.00
Baltic International USA	0	0	0	0	0.00

Stellus Capital Investment currently has a consensus price target of $13.00, indicating a potential upside of 2.91%. Given Stellus Capital Investment’s stronger consensus rating and higher possible upside, analysts clearly believe Stellus Capital Investment is more favorable than Baltic International USA.

Earnings and Valuation

This table compares Stellus Capital Investment and Baltic International USA”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Stellus Capital Investment	$104.74 million	3.49	$45.85 million	$1.09	11.59
Baltic International USA	N/A	N/A	-$30,000.00	($0.01)	-0.60

Stellus Capital Investment has higher revenue and earnings than Baltic International USA. Baltic International USA is trading at a lower price-to-earnings ratio than Stellus Capital Investment, indicating that it is currently the more affordable of the two stocks.

Summary

Stellus Capital Investment beats Baltic International USA on 11 of the 12 factors compared between the two stocks.

About Stellus Capital Investment

Stellus Capital Investment Corporation is a business development company specializing in investments in private middle-market companies. It invests through first lien, second lien, unitranche, and mezzanine debt financing, often with a corresponding equity investment. The fund prefers to invest in US and Canada. The fund seeks to invest in companies with an EBITDA between $5 million and $50 million.

About Baltic International USA

Baltic International USA, Inc. does not have significant operations. It intends to investigate and acquire a target company or business seeking to become a publicly held corporation. The company was incorporated in 1991 and is based in Houston, Texas.