Financial Review: Eltek (NASDAQ:ELTK) vs. Surge Component (OTCMKTS:SPRS)

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

Risk & Volatility

Surge Component has a beta of 0.42, indicating that its share price is 58% less volatile than the S&P 500. Comparatively, Eltek has a beta of 0.65, indicating that its share price is 35% less volatile than the S&P 500.

Analyst Ratings

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

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Surge Component	0	0	0	0	0.00
Eltek	0	1	0	0	2.00

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Surge Component	2.56%	4.49%	3.47%
Eltek	2.35%	2.68%	1.85%

Insider and Institutional Ownership

64.6% of Eltek shares are held by institutional investors. 56.0% of Surge Component shares are held by insiders. Comparatively, 72.0% of Eltek shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Valuation & Earnings

This table compares Surge Component and Eltek”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Surge Component	$31.21 million	0.60	$830,000.00	$0.15	21.33
Eltek	$46.53 million	1.24	$4.22 million	$0.17	50.59

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

Summary

Eltek beats Surge Component on 9 of the 12 factors compared between the two stocks.

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.

About Eltek

Eltek Ltd. manufactures, markets, and sells printed circuit boards (PCBs) in Israel, Europe, North America, India, the Netherlands, and internationally. It offers a range of custom designed PCBs, including rigid, double-sided and multi-layer PCBs, and flexible circuitry boards. The company also provides high density interconnect, flex-rigid, and multi-layered boards. It primarily serves medical technology, defense and aerospace, industrial, telecom, and networking equipment industries, as well as contract electronic manufacturers. The company markets and sells its products primarily through direct sales personnel, sales representatives, and PCB trading and manufacturing companies. Eltek Ltd. was incorporated in 1970 and is headquartered in Petah Tikva, Israel. Eltek Ltd. operates as a subsidiary of Nistec Golan Ltd.