Function(x) (OTCMKTS: FNCX) and Eros International (NYSE:EROS) are both small-cap computer and technology companies, but which is the better investment? We will contrast the two businesses based on the strength of their risk, profitability, valuation, dividends, earnings, institutional ownership and analyst recommendations.

Institutional & Insider Ownership

0.0% of Function(x) shares are held by institutional investors. Comparatively, 60.5% of Eros International shares are held by institutional investors. 60.5% of Function(x) shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a summary of current ratings for Function(x) and Eros International, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Function(x) 0 0 0 0 N/A
Eros International 0 0 2 0 3.00

Eros International has a consensus target price of $17.00, suggesting a potential upside of 71.72%. Given Eros International’s higher possible upside, analysts plainly believe Eros International is more favorable than Function(x).

Risk and Volatility

Function(x) has a beta of -0.55, meaning that its stock price is 155% less volatile than the S&P 500. Comparatively, Eros International has a beta of 0.57, meaning that its stock price is 43% less volatile than the S&P 500.

Valuation and Earnings

This table compares Function(x) and Eros International’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Function(x) $4.51 million 0.50 -$61.86 million ($7.95) -0.01
Eros International $252.99 million 2.02 $3.80 million $0.04 247.56

Eros International has higher revenue and earnings than Function(x). Function(x) is trading at a lower price-to-earnings ratio than Eros International, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Function(x) and Eros International’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Function(x) N/A N/A N/A
Eros International 0.96% 0.22% 0.15%

Summary

Eros International beats Function(x) on 11 of the 12 factors compared between the two stocks.

Function(x) Company Profile

Function(x) Inc., formerly DraftDay Fantasy Sports, Inc., is a diversified media and entertainment company. The Company conducts three lines of businesses, which are digital publishing through Wetpaint.com, Inc. (Wetpaint) and Rant, Inc. (Rant); fantasy sports gaming through DraftDay Gaming Group, Inc. (DDGG), and digital content distribution through Choose Digital, Inc. (Choose Digital). The Company’s segments include Wetpaint, which is a media channel reporting original news stories and publishing information content covering television shows, music, celebrities, entertainment news and fashion; Choose Digital, which is a business-to-business platform for delivering digital content; DDGG, which is a business-to-business operator of daily fantasy sports, and Other. The Company’s digital publishing business also includes Rant, which is a digital publisher that publishes original content in over 13 verticals, such as in sports, entertainment, pets, cars and food.

Eros International Company Profile

Eros International Plc (Eros) is a holding company, which serves the Indian film entertainment industry. The Company’s principal activities include the acquisition, co-production and distribution of Indian films and related content. It distributes its film content through the distribution channels, such as theatrical, including multiplex chains and standalone theaters; television syndication, including satellite television broadcasting, cable television and terrestrial television; digital and ancillary, including music, inflight entertainment, home video, Internet protocol television (IPTV), video on demand (VOD), and Internet channels and Eros Now. As of March 31, 2016, its distribution network extends to over 50 countries, such as the United States, the United Kingdom, the Middle East, Germany, Poland, Russia, Romania, Indonesia and Arabic speaking countries. It conducts global operations through its Indian and international subsidiaries, including Eros International Media Limited.

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