Analyzing SofTech (OTCMKTS:SOFT) and Neonode (NASDAQ:NEON)

Neonode (NASDAQ:NEON) and SofTech (OTCMKTS:SOFT) are both computer and technology companies, but which is the better investment? We will compare the two companies based on the strength of their profitability, earnings, risk, analyst recommendations, institutional ownership, dividends and valuation.

Profitability

This table compares Neonode and SofTech’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Neonode	408.88%	-38.60%	-32.68%
SofTech	N/A	N/A	N/A

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Neonode and SofTech, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Neonode	1	1	0	0	1.50
SofTech	0	0	0	0	0.00

Neonode presently has a consensus target price of $6.00, suggesting a potential upside of 212.50%. Given Neonode’s stronger consensus rating and higher possible upside, research analysts clearly believe Neonode is more favorable than SofTech.

Earnings & Valuation

This table compares Neonode and SofTech”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Neonode	$3.11 million	10.36	-$6.47 million	($0.32)	-6.00
SofTech	N/A	N/A	N/A	N/A	N/A

SofTech has lower revenue, but higher earnings than Neonode.

Institutional and Insider Ownership

11.6% of Neonode shares are owned by institutional investors. 23.9% of Neonode shares are owned by insiders. Comparatively, 28.6% of SofTech shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Summary

Neonode beats SofTech on 5 of the 8 factors compared between the two stocks.

About Neonode

Neonode Inc., together with its subsidiaries, develops optical sensing solutions for contactless touch, touch, and gesture sensing in the United States, Japan, South Korea, Germany, Switzerland, France, Sweden, China, and internationally. It also offers software solutions for machine perception to detect and track persons and objects in video streams from cameras and other types of imagers. In addition, the company sells touch sensor modules to OEMs, original design manufacturers, and systems integrators. Further, it licenses its zForce technology to original equipment manufacturers and automotive Tier 1 suppliers, as well as provides non-recurring engineering services related to application development. It serves office equipment, automotive, industrial automation, medical, military, and avionics markets. Neonode Inc. was incorporated in 1997 and is headquartered in Stockholm, Sweden.

About SofTech

SofTech, Inc. develops, markets, distributes, and supports computer aided design (CAD), and product data management and collaboration computer solutions for the product lifecycle management (PLM) industry primarily in North America, Europe, and Asia. The company offers ProductCenter, a collaborative PLM solution, which manages the engineering data and electronic files of discrete parts designed in various used third party proprietary design technologies; delivers a combination of document management, design integration, configuration control, change management, bill of materials management, and integration capability with other enterprise-wide systems; enables secure management of product information; and allows engineers and the design chain to manage, share, modify, and track product data and documents in the product development lifecycle. Its ProductCenter technology also allows employees, customers, suppliers, and other team members to securely exchange product information while maintaining a centralized database of critical product data; and enables integration with other business applications, such as enterprise resource planning, supply chain management, and customer relationship management for data exchange across the product lifecycle. In addition, the company offers Connector platform, a technology that allows for a direct interface between Aras Corporation’s Innovator solution and CAD products. SofTech, Inc. markets and distributes its products and services primarily through a direct sales force and its service organization, as well as through resellers. The company was founded in 1969 and is headquartered in Lowell, Massachusetts.