Silicom (NASDAQ:SILC – Get Free Report) and FalconStor Software (OTCMKTS:FALC – Get Free Report) are both small-cap computer and technology companies, but which is the superior investment? We will contrast the two companies based on the strength of their risk, earnings, analyst recommendations, dividends, valuation, profitability and institutional ownership.
Analyst Recommendations
This is a breakdown of current recommendations for Silicom and FalconStor Software, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Silicom | 0 | 1 | 0 | 0 | 2.00 |
| FalconStor Software | 0 | 0 | 0 | 0 | 0.00 |
Insider & Institutional Ownership
52.9% of Silicom shares are owned by institutional investors. Comparatively, 9.5% of FalconStor Software shares are owned by institutional investors. 25.4% of Silicom shares are owned by insiders. Comparatively, 52.8% of FalconStor Software shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.
Valuation & Earnings
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Silicom | $58.11 million | 1.79 | -$13.71 million | ($2.28) | -8.03 |
| FalconStor Software | $10.42 million | 1.24 | $690,000.00 | ($0.18) | -10.00 |
FalconStor Software has lower revenue, but higher earnings than Silicom. FalconStor Software is trading at a lower price-to-earnings ratio than Silicom, indicating that it is currently the more affordable of the two stocks.
Risk & Volatility
Silicom has a beta of 0.97, meaning that its stock price is 3% less volatile than the S&P 500. Comparatively, FalconStor Software has a beta of 3.21, meaning that its stock price is 221% more volatile than the S&P 500.
Profitability
This table compares Silicom and FalconStor Software’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Silicom | -22.50% | -10.38% | -8.72% |
| FalconStor Software | 3.68% | -2.07% | 3.31% |
Summary
FalconStor Software beats Silicom on 7 of the 12 factors compared between the two stocks.
About Silicom
Silicom Ltd., together with its subsidiaries, designs, manufactures, markets, and supports networking and data infrastructure solutions for servers, server-based systems, and communications devices. It offers server network interface cards; and smart cards, such as smart server adapters, which include redirector and switching cards, encryption and data compression hardware acceleration cards, forward error correction acceleration and offloading cards, time synchronization cards, and field programmable gate array-based cards. The company also provides virtualized and universal customer-premises equipment; and edge devices for SD-WAN, secure access service edge, Telco dedicated routers, and NFV deployments. It serves original equipment manufacturing, cloud, telco, mobile, and related service provider markets. The company operates in the United States, North America, Israel, Europe, and the Asia Pacific. Silicom Ltd. was incorporated in 1987 and is headquartered in Kfar Saba, Israel.
About FalconStor Software
FalconStor Software, Inc., a storage software company, enables enterprise customers and managed service providers to secure, migrate, and protect their data worldwide. It offers FalconStor Virtual Tape Library, a software that emulates and replaces cumbersome physical tape libraries for archive related data preservation without being replacing their enterprise backup and archive software and associated processes; FalconStor StorSafe, a long-term archive data management software; FalconStor Continuous Data Protector delivers instant data availability, and reliable recovery; and FalconStor Network Storage Server for data storage virtualization and business continuity in heterogeneous environments. The company also provides FalconStor StorSigh, a long-term archive and business continuity driven data replication from one centralized management point; FalconStor RecoverTrac Disaster Recovery Technology that streamlines the implementation, testing, and execution of disaster recovery operations; and FalconStor MicroScanTM Technology, which minimizes the amount of data transferred during replication by eliminating inefficiencies at the application and file system layer. It sells its products through authorized partners, value-added resellers, solution providers, system integrators, direct market resellers, distributors, managed service providers, cloud service providers, and original equipment manufacturers, as well as directly to customers. The company was incorporated in 1994 and is headquartered in Austin, Texas.
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