Great Elm Capital Group (NASDAQ:GEC) and FalconStor Software (OTCMKTS:FALCD) are both small-cap finance companies, but which is the better stock? We will contrast the two businesses based on the strength of their earnings, risk, valuation, institutional ownership, profitability, analyst recommendations and dividends.

Insider and Institutional Ownership

46.3% of Great Elm Capital Group shares are owned by institutional investors. Comparatively, 0.2% of FalconStor Software shares are owned by institutional investors. 17.8% of Great Elm Capital Group shares are owned by company insiders. Comparatively, 61.5% of FalconStor Software shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Profitability

This table compares Great Elm Capital Group and FalconStor Software’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Great Elm Capital Group -6.66% -12.68% -4.45%
FalconStor Software -9.85% -0.46% -2.07%

Analyst Recommendations

This is a summary of current ratings for Great Elm Capital Group and FalconStor Software, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Great Elm Capital Group 0 0 0 0 N/A
FalconStor Software 0 0 0 0 N/A

Valuation and Earnings

This table compares Great Elm Capital Group and FalconStor Software’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Great Elm Capital Group $51.18 million 1.52 -$2.91 million N/A N/A
FalconStor Software $17.84 million 1.31 -$910,000.00 N/A N/A

FalconStor Software has lower revenue, but higher earnings than Great Elm Capital Group.

Volatility and Risk

Great Elm Capital Group has a beta of 0.56, meaning that its share price is 44% less volatile than the S&P 500. Comparatively, FalconStor Software has a beta of 0.8, meaning that its share price is 20% less volatile than the S&P 500.

Summary

FalconStor Software beats Great Elm Capital Group on 5 of the 9 factors compared between the two stocks.

Great Elm Capital Group Company Profile

Great Elm Capital Group, Inc., through its subsidiaries, engages in investment management and real estate property rental businesses. It provides investment advisory services. The company was formerly known as Unwired Planet, Inc. and changed its name to Great Elm Capital Group, Inc. in June 2016. Great Elm Capital Group, Inc. was founded in 1994 and is headquartered in Waltham, Massachusetts.

FalconStor Software Company Profile

FalconStor Software, Inc., a storage software company, develops, manufactures, and sells data migration, business continuity, disaster recovery, optimized backup, de-duplication solutions, and other related maintenance, implementation, and engineering services worldwide. It offers FalconStor Data Mastery Platform, a software-defined platform that provides migration, continuity, protection/recovery, and optimization for storage environment through a single management interface; FalconStor network storage server for migration, storage virtualization, provisioning, and management; and FalconStor continuous data protector for bootable snapshots, zero-impact backup, and local and remote disaster recovery. The company also provides FalconStor optimized backup and deduplication solution for optimized backup, archive to tape, block and file based deduplication, and storage capacity optimization. In addition, it offers maintenance, implementation, and engineering services. The company sells its products through authorized partners, value-added resellers, solution providers, system integrators, direct market resellers, distributors, managed service providers, cloud service providers, and original equipment manufacturers, as well as directly to customers. FalconStor Software, Inc. was incorporated in 1994 and is headquartered in Austin, Texas.

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