Comparing Super Micro Computer (SMCI) & Sigma Designs (SIGM)

Super Micro Computer (NASDAQ: SMCI) and Sigma Designs (NASDAQ:SIGM) are both small-cap computer and technology companies, but which is the better stock? We will compare the two businesses based on the strength of their risk, profitabiliy, analyst recommendations, institutional ownership, dividends, valuation and earnings.

Earnings & Valuation

This table compares Super Micro Computer and Sigma Designs’ revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	EBITDA	Earnings Per Share	Price/Earnings Ratio
Super Micro Computer	$2.34 billion	0.56	$101.73 million	$1.14	23.77
Sigma Designs	$206.33 million	1.15	$4.71 million	N/A	N/A

Super Micro Computer has higher revenue and earnings than Sigma Designs.

Risk and Volatility

Super Micro Computer has a beta of 0.14, indicating that its stock price is 86% less volatile than the S&P 500. Comparatively, Sigma Designs has a beta of 1.15, indicating that its stock price is 15% more volatile than the S&P 500.

Profitability

This table compares Super Micro Computer and Sigma Designs’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Super Micro Computer	2.53%	7.96%	4.60%
Sigma Designs	-12.15%	-11.77%	-8.10%

Analyst Recommendations

This is a breakdown of recent recommendations for Super Micro Computer and Sigma Designs, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Super Micro Computer	0	1	5	0	2.83
Sigma Designs	1	2	3	0	2.33

Super Micro Computer presently has a consensus target price of $32.50, suggesting a potential upside of 19.93%. Sigma Designs has a consensus target price of $8.60, suggesting a potential upside of 38.71%. Given Sigma Designs’ higher possible upside, analysts plainly believe Sigma Designs is more favorable than Super Micro Computer.

Institutional & Insider Ownership

72.1% of Super Micro Computer shares are held by institutional investors. Comparatively, 60.2% of Sigma Designs shares are held by institutional investors. 23.6% of Super Micro Computer shares are held by insiders. Comparatively, 3.5% of Sigma Designs shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Summary

Super Micro Computer beats Sigma Designs on 9 of the 12 factors compared between the two stocks.

About Super Micro Computer

Super Micro Computer, Inc. is engaged in developing and providing end-to-end green computing solutions to the cloud computing, data center, enterprise information technology (IT), big data, high performance computing (HPC) and Internet of Things (IoT)/embedded markets. The Company’s solutions range from server, storage, blade and workstations to full racks, networking devices, server management software and technology support and services. The Company sells its server systems and server subsystems and accessories through a combination of distributors, including value added resellers and system integrators, and other equipment manufacturers (OEMs). As of June 30, 2016, the Company offered over 4,950 stock keeping units (SKUs), including SKUs for server and storage systems, serverboards, chassis, power supplies and other system accessories. The Company develops and manufactures server solutions based upon a modular and open architecture.

About Sigma Designs

Sigma Designs, Inc. is a provider of global integrated semiconductor solutions. The Company offers media platforms for use in the home entertainment and home control markets. The Company sells its products into markets, including smart television, media connectivity, set-top box and Internet of Things (IoT) devices. The Company’s media processor product line consists of a range of functionally similar platforms that are based on integrated chips, embedded software and hardware reference designs. The Company’s media connectivity product line consists of wired home networking controller chipsets that are designed to provide connectivity solutions between various home entertainment products and incoming video streams. The Company’s IoT devices product line consists of its wireless Z-Wave chips and modules. The Company is engaged in the license of its internally developed intellectual property. It also offers legacy products that are sold into prosumer and other industrial applications.