Fusion Telecommunications Int’l (NASDAQ: FSNN) and Otelco (NASDAQ:OTT) are both small-cap computer and technology companies, but which is the superior business? We will contrast the two businesses based on the strength of their institutional ownership, earnings, analyst recommendations, valuation, dividends, risk and profitability.
23.1% of Fusion Telecommunications Int’l shares are held by institutional investors. 19.1% of Fusion Telecommunications Int’l shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.
This is a summary of recent ratings and recommmendations for Fusion Telecommunications Int’l and Otelco, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Fusion Telecommunications Int’l||0||0||2||0||3.00|
Fusion Telecommunications Int’l presently has a consensus target price of $4.00, indicating a potential upside of 1.52%. Given Fusion Telecommunications Int’l’s higher possible upside, research analysts plainly believe Fusion Telecommunications Int’l is more favorable than Otelco.
This table compares Fusion Telecommunications Int’l and Otelco’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Fusion Telecommunications Int’l||-10.36%||-276.63%||-11.17%|
Volatility & Risk
Fusion Telecommunications Int’l has a beta of 2.04, suggesting that its stock price is 104% more volatile than the S&P 500. Comparatively, Otelco has a beta of 0.33, suggesting that its stock price is 67% less volatile than the S&P 500.
Valuation & Earnings
This table compares Fusion Telecommunications Int’l and Otelco’s revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Fusion Telecommunications Int’l||$122.04 million||0.72||-$12.71 million||($0.81)||-4.86|
Otelco has lower revenue, but higher earnings than Fusion Telecommunications Int’l. Fusion Telecommunications Int’l is trading at a lower price-to-earnings ratio than Otelco, indicating that it is currently the more affordable of the two stocks.
Fusion Telecommunications Int’l beats Otelco on 7 of the 10 factors compared between the two stocks.
Fusion Telecommunications Int’l Company Profile
Fusion Telecommunications International, Inc. is a United States-based provider of integrated cloud solutions, including cloud voice, cloud connectivity, cloud infrastructure, cloud computing, and managed cloud-based applications to businesses, and voice over Internet Protocol (VoIP)-based voice services to carriers. The Company operates through two segments: Business Services and Carrier Services. Through Business Services segment, it provides cloud voice, cloud connectivity, cloud infrastructure, cloud computing and managed cloud-based applications to businesses of all sizes. Its suite of business services includes unified communications as a service, session initiation protocol trunking solution and file sharing solution. The Carrier Services segment includes termination of domestic and international carrier traffic utilizing VoIP technology. It offers solutions to small, medium and large businesses. It offers domestic and international VoIP services to carriers around the world.
Otelco Company Profile
Otelco Inc. provides a range of telecommunications services on a retail and wholesale basis. These services include local and long distance calling; network access to and from its customers; data transport; digital high-speed and dial-up Internet access; cable, satellite and Internet protocol television; wireless, and other telephone related services. The principal markets for these services are residential and business customers residing in and adjacent to the exchanges the Company serves in Alabama, Massachusetts, Maine, Missouri, Vermont and West Virginia. In addition, the Company serves business customers throughout Maine and New Hampshire and provides dial-up Internet service throughout the states of Maine and Missouri. In January 2014, the Company acquired Reliable Networks, a provider of cloud hosting and managed services for companies who rely on mission-critical applications.