Fox Factory (FOXF) versus Federal-Mogul (FDML) Critical Comparison

Federal-Mogul (NASDAQ: FDML) and Fox Factory (NASDAQ:FOXF) are both small-cap cyclical consumer goods & services companies, but which is the better stock? We will contrast the two companies based on the strength of their dividends, institutional ownership, valuation, analyst recommendations, risk, earnings and profitability.

Institutional & Insider Ownership

98.5% of Federal-Mogul shares are owned by institutional investors. Comparatively, 98.1% of Fox Factory shares are owned by institutional investors. 82.1% of Federal-Mogul shares are owned by company insiders. Comparatively, 21.4% of Fox Factory shares are owned by company 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

This table compares Federal-Mogul and Fox Factory’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Federal-Mogul N/A N/A N/A $0.49 20.37
Fox Factory $403.08 million 3.64 $35.67 million $1.29 30.27

Fox Factory has higher revenue and earnings than Federal-Mogul. Federal-Mogul is trading at a lower price-to-earnings ratio than Fox Factory, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Federal-Mogul and Fox Factory’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Federal-Mogul 0.31% 16.56% 2.17%
Fox Factory 10.76% 28.25% 16.44%

Analyst Recommendations

This is a summary of recent ratings for Federal-Mogul and Fox Factory, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Federal-Mogul 0 0 0 0 N/A
Fox Factory 0 7 1 0 2.13

Fox Factory has a consensus target price of $38.50, suggesting a potential downside of 1.41%. Given Fox Factory’s higher probable upside, analysts plainly believe Fox Factory is more favorable than Federal-Mogul.

Summary

Fox Factory beats Federal-Mogul on 7 of the 9 factors compared between the two stocks.

Federal-Mogul Company Profile

Federal-Mogul Holdings Corp, formerly Federal-Mogul Corporation, is a global supplier of technology and innovation in vehicle and industrial products for fuel economy, emissions reduction and safety systems. The Company serves original equipment manufacturers (OEM) and servicers (OES) (collectively OE) of automotive, light, medium and heavy-duty commercial vehicles, off-road, agricultural, marine, rail, aerospace, power generation and industrial equipment, as well as the worldwide aftermarket. As of December 31, 2012, the Company had OEM products included on more than 300 global vehicle platforms and more than 700 global powertrains used in light, medium and heavy-duty vehicles. The Company offers brands, OE replacement and premium products for all aftermarket customers.

Fox Factory Company Profile

Fox Factory Holding Corp. is engaged in the manufacturing, sale and service of ride dynamics products. The Company’s products fall into two categories: bikes, and powered vehicles, including side-by-sides, on-road vehicles with off-road capabilities, off-road vehicles and trucks, all-terrain vehicles (ATVs), snowmobiles, specialty vehicles and applications, and motorcycles. The Company’s brands include FOX, FOX RACING SHOX and RACE FACE. The Company’s products include 34 Factory Series FLOAT FIT4, which provides external adjustability with its fourth-generation FOX Isolated Technology and closed-cartridge damper, and includes a self-adjusting negative chamber air spring; X2 technology, utilized in its Factory Series FLOAT and DH rear shocks; PODIUM Internal Bypass, and X2 technology utilized in its 2.5 PODIUM shocks for side-by-sides that feature high and low speed rebound adjustment, high and low speed compression adjustment, and a dual-rate spring for the rear shocks.

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