Fenix Parts (OTCMKTS: FENX) and Meritor (NYSE:MTOR) are both auto/tires/trucks companies, but which is the superior investment? We will contrast the two businesses based on the strength of their earnings, risk, analyst recommendations, profitability, valuation, dividends and institutional ownership.
Insider and Institutional Ownership
4.1% of Fenix Parts shares are owned by institutional investors. Comparatively, 95.5% of Meritor shares are owned by institutional investors. 16.6% of Fenix Parts shares are owned by insiders. Comparatively, 2.3% of Meritor shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.
Volatility and Risk
Fenix Parts has a beta of 0.45, meaning that its stock price is 55% less volatile than the S&P 500. Comparatively, Meritor has a beta of 2.29, meaning that its stock price is 129% more volatile than the S&P 500.
This is a breakdown of recent ratings for Fenix Parts and Meritor, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Meritor has a consensus price target of $26.83, suggesting a potential upside of 11.25%. Given Meritor’s higher probable upside, analysts clearly believe Meritor is more favorable than Fenix Parts.
Earnings & Valuation
This table compares Fenix Parts and Meritor’s top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Fenix Parts||$132.10 million||0.02||-$42.86 million||($2.03)||-0.08|
|Meritor||$3.35 billion||0.64||$324.00 million||$3.55||6.79|
Meritor has higher revenue and earnings than Fenix Parts. Fenix Parts is trading at a lower price-to-earnings ratio than Meritor, indicating that it is currently the more affordable of the two stocks.
This table compares Fenix Parts and Meritor’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Meritor beats Fenix Parts on 11 of the 13 factors compared between the two stocks.
About Fenix Parts
Fenix Parts, Inc. is engaged in auto recycling business. The Company recovers and resells original equipment manufacturer (OEM) parts, components and systems, such as engines, transmissions, radiators, trunks, lamps and seats reclaimed from damaged, totaled or low value vehicles. The Company operates through Automobile Recycling segment. The Company purchases its vehicles primarily at auto salvage auctions. Upon receipt of vehicles, the Company inventories and then dismantles the vehicles and sells the recycled components. Its customers include collision repair shops (body shops), mechanical repair shops, auto dealerships and individual retail customers. The Company also generates a portion of its revenue from the sale as scrap of the unusable parts and materials, from the sale of used cars and motorcycles, the sale of aftermarket parts, and from the sale of extended warranty contracts.
Meritor, Inc. is a supplier of a range of integrated systems, modules and components to original equipment manufacturers (OEMs) and the aftermarket for the commercial vehicle, transportation and industrial sectors. The Company’s segments include Commercial Truck & Industrial and Aftermarket & Trailer. The Commercial Truck & Industrial segment supplies drivetrain systems and components, including axles, drivelines and braking and suspension systems, for medium- and heavy-duty trucks, off-highway, military, construction, bus and coach, fire and emergency and other applications in North America, South America, Europe and Asia Pacific. The Commercial Truck & Industrial segment also includes the Company’s aftermarket businesses in Asia Pacific and South America. The Aftermarket & Trailer segment supplies axles, brakes, drivelines, suspension parts and other replacement and remanufactured parts to commercial vehicle aftermarket customers in North America and Europe.
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