Analyzing Redline Communications Group (OTCMKTS:RDLCF) & Applied Optoelectronics (NASDAQ:AAOI)

Redline Communications Group (OTCMKTS:RDLCF) and Applied Optoelectronics (NASDAQ:AAOI) are both computer and technology companies, but which is the superior investment? We will contrast the two companies based on the strength of their risk, earnings, valuation, analyst recommendations, institutional ownership, profitability and dividends.

Analyst Ratings

This is a summary of current recommendations and price targets for Redline Communications Group and Applied Optoelectronics, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Redline Communications Group	0	0	0	0	N/A
Applied Optoelectronics	0	1	3	0	2.75

Applied Optoelectronics has a consensus target price of $16.88, indicating a potential upside of 40.86%. Given Applied Optoelectronics’ higher probable upside, analysts clearly believe Applied Optoelectronics is more favorable than Redline Communications Group.

Institutional & Insider Ownership

61.7% of Applied Optoelectronics shares are owned by institutional investors. 6.1% of Applied Optoelectronics shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Valuation and Earnings

This table compares Redline Communications Group and Applied Optoelectronics’ revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Redline Communications Group	N/A	N/A	N/A	N/A	N/A
Applied Optoelectronics	$217.65 million	2.11	-$56.05 million	($1.78)	-6.73

Redline Communications Group has higher earnings, but lower revenue than Applied Optoelectronics.

Profitability

This table compares Redline Communications Group and Applied Optoelectronics’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Redline Communications Group	N/A	N/A	N/A
Applied Optoelectronics	-25.75%	-13.83%	-6.71%

Summary

Applied Optoelectronics beats Redline Communications Group on 5 of the 8 factors compared between the two stocks.

About Redline Communications Group

Redline Communications Group Inc., together with its subsidiaries, develops broadband fixed wireless base stations, subscriber stations, and network management systems for point-to-point and point-to-multipoint applications for commercial end-users. It operates through Hardware and Software, Professional Services and 3rd Party Equipment, and Maintenance and Support segments. The company offers Ellipse, a series of base stations; Edge and Elte wireless terminals; Enterprise, a wireless customer premise equipment; RAS-Elite, a portable auto-acquire outdoor wireless solution; RAS-Extend, a mechanical auto tracking system; RDL-3000 connect series of remote terminals; PoE, an industrial grade power injector; and FlexCore, an EPC software. It also provides FlexTALK, a push-to-talk solution; and ClearView NMS, a network management software, as well as antennas, cables, mounting kits, POE power injectors, and surge protectors. In addition, the company offers RF planning and site survey, 4G and 5G mobile network design and optimization, deployment and resident engineering, wireless network performance audit, and program and project management services. It serves oil and gas, mining, utilities, transportation, government, military, and telecom service provider markets through regional distributors, channel partners, and systems integrators. The company has operations in the Americas, the Middle East, Europe, Africa, and the Asia Pacific. Redline Communications Group Inc. was founded in 1999 and is headquartered in Markham, Canada.

About Applied Optoelectronics

Applied Optoelectronics, Inc. designs, manufactures, and sells fiber-optic networking products in the United States, Taiwan, and China. It offers optical modules, optical filters, lasers, laser components, subassemblies, transmitters and transceivers, turn-key equipment, headend, node, distribution equipment, and amplifiers. The company sells its products to internet data center operators, cable television, telecom equipment manufacturers, fiber-to-the-home, and internet service providers through its direct and indirect sales channels. Applied Optoelectronics, Inc. was incorporated in 1997 and is headquartered in Sugar Land, Texas.