Head-To-Head Analysis: American Superconductor (NASDAQ:AMSC) vs. Surge Component (OTCMKTS:SPRS)

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

Analyst Recommendations

This is a summary of recent recommendations for American Superconductor and Surge Component, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
American Superconductor	0	1	1	0	2.50
Surge Component	0	0	0	0	0.00

American Superconductor presently has a consensus price target of $39.00, indicating a potential upside of 30.35%. Given American Superconductor’s stronger consensus rating and higher probable upside, equities analysts plainly believe American Superconductor is more favorable than Surge Component.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
American Superconductor	5.69%	6.48%	4.54%
Surge Component	2.56%	4.49%	3.47%

Volatility and Risk

American Superconductor has a beta of 2.96, indicating that its share price is 196% more volatile than the S&P 500. Comparatively, Surge Component has a beta of 0.42, indicating that its share price is 58% less volatile than the S&P 500.

Insider and Institutional Ownership

52.3% of American Superconductor shares are held by institutional investors. 4.8% of American Superconductor shares are held by insiders. Comparatively, 56.0% of Surge Component shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Earnings and Valuation

This table compares American Superconductor and Surge Component”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
American Superconductor	$222.82 million	6.07	$6.03 million	$0.37	80.86
Surge Component	$31.21 million	0.59	$830,000.00	$0.15	21.13

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

Summary

American Superconductor beats Surge Component on 13 of the 14 factors compared between the two stocks.

About American Superconductor

American Superconductor Corporation, together with its subsidiaries, provides megawatt-scale power resiliency solutions worldwide. The company operates through Grid and Wind segments. The Grid segment offers products and services that enable electric utilities, industrial facilities, and renewable energy project developers to connect, transmit, and distribute power under the Gridtec Solutions brand. It provides transmission planning services, which identify power grid congestion, poor power quality, and other risks; grid interconnection solutions for wind farms and solar power plants, power quality systems, and transmission and distribution cable systems; D-VAR systems used for controlling power flow and voltage in the AC transmission system; actiVAR system, a fast-switching medium-voltage reactive compensation solution; armorVAR system installed for reactive compensation, power factor correction, loss reduction, utility bill savings, and mitigation of common power quality concerns related to power converter-based generation and load devices; and D-VAR volt var optimization (VVO) that serves the distribution power grid market. This segment also offers ship protection systems, which reduce a naval ship’s magnetic signature; and ON board power delivery systems, power generation systems, and propulsion systems; and transformers and rectifiers systems. The Wind segment designs wind turbine systems and licenses these designs to third parties under the Windtec Solutions brand. It also supplies power electronics and software-based control systems, engineered designs, and support services; and provides customer support services to wind turbine manufacturers. This segment’s design portfolio comprises a range of drivetrains and power ratings of 2 megawatts and higher. American Superconductor Corporation was incorporated in 1987 and is headquartered in Ayer, Massachusetts.

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.