Stoneridge (SRI) & Fenix Parts (FENX) Critical Comparison

Stoneridge (NYSE: SRI) and Fenix Parts (OTCMKTS:FENX) are both small-cap cyclical consumer goods & services companies, but which is the better investment? We will contrast the two companies based on the strength of their earnings, institutional ownership, valuation, profitability, risk, analyst recommendations and dividends.

Analyst Ratings

This is a breakdown of recent recommendations for Stoneridge and Fenix Parts, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Stoneridge 0 2 0 0 2.00
Fenix Parts 0 0 0 0 N/A

Stoneridge currently has a consensus price target of $22.00, indicating a potential downside of 7.64%. Given Stoneridge’s higher possible upside, equities research analysts clearly believe Stoneridge is more favorable than Fenix Parts.

Profitability

This table compares Stoneridge and Fenix Parts’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Stoneridge 9.45% 20.37% 8.58%
Fenix Parts -30.56% -66.11% -34.71%

Insider & Institutional Ownership

87.0% of Stoneridge shares are held by institutional investors. Comparatively, 4.1% of Fenix Parts shares are held by institutional investors. 5.3% of Stoneridge shares are held by company insiders. Comparatively, 16.6% of Fenix Parts shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Earnings & Valuation

This table compares Stoneridge and Fenix Parts’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Stoneridge $695.98 million 0.96 $77.46 million $2.62 9.09
Fenix Parts $132.10 million 0.03 -$42.86 million ($1.90) -0.11

Stoneridge has higher revenue and earnings than Fenix Parts. Fenix Parts is trading at a lower price-to-earnings ratio than Stoneridge, indicating that it is currently the more affordable of the two stocks.

Summary

Stoneridge beats Fenix Parts on 10 of the 11 factors compared between the two stocks.

About Stoneridge

Stoneridge, Inc. is a designer and manufacturer of engineered electrical and electronic components, modules and systems for the automotive, commercial, motorcycle, off-highway and agricultural vehicle markets. The Company operates through three segments: Control Devices, Electronics and PST. The Company’s Control Devices segment designs and manufactures products that monitor, measure or activate specific functions within a vehicle and includes product lines, such as sensors, switches, valves, and actuators. The Company’s Electronics segment designs and manufactures electronic instrument clusters, electronic control units and driver information systems. The PST segment is engaged in the design, manufacture and sale of in-vehicle audio and video devices, electronic vehicle security alarms, convenience accessories, vehicle tracking devices and monitoring services primarily for the automotive and motorcycle industry. It operated in 25 locations in 12 countries, as of December 31, 2016.

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.

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