Critical Survey: Trans-Lux (OTCMKTS:TNLX) and Fabrinet (NYSE:FN)

Trans-Lux (OTCMKTS:TNLX) and Fabrinet (NYSE:FN) are both technology companies, but which is the superior investment? We will contrast the two businesses based on the strength of their analyst recommendations, dividends, institutional ownership, profitability, risk, valuation and earnings.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Trans-Lux and Fabrinet, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Trans-Lux	0	0	0	0	0.00
Fabrinet	0	5	5	0	2.50

Fabrinet has a consensus price target of $649.50, indicating a potential upside of 35.21%. Given Fabrinet’s stronger consensus rating and higher probable upside, analysts plainly believe Fabrinet is more favorable than Trans-Lux.

Risk and Volatility

Trans-Lux has a beta of -1.85, meaning that its stock price is 285% less volatile than the S&P 500. Comparatively, Fabrinet has a beta of 1.23, meaning that its stock price is 23% more volatile than the S&P 500.

Insider and Institutional Ownership

11.9% of Trans-Lux shares are owned by institutional investors. Comparatively, 97.4% of Fabrinet shares are owned by institutional investors. 58.7% of Trans-Lux shares are owned by company insiders. Comparatively, 0.2% of Fabrinet shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Profitability

This table compares Trans-Lux and Fabrinet’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Trans-Lux	N/A	N/A	N/A
Fabrinet	9.94%	19.83%	13.41%

Valuation and Earnings

This table compares Trans-Lux and Fabrinet”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Trans-Lux	$12.86 million	0.01	-$3.48 million	($0.25)	-0.04
Fabrinet	$3.42 billion	5.03	$332.53 million	$11.64	41.27

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

Summary

Fabrinet beats Trans-Lux on 13 of the 14 factors compared between the two stocks.

About Trans-Lux

Trans-Lux Corporation engages in the design and manufacture of digital display solutions and fixed digit scoreboards. It operates in two segments, Digital Product Sales; and Digital Product Lease and Maintenance. The Digital Product Sales segment sells indoor and outdoor digital product signage products. The Digital Product Lease and Maintenance segment is involved in the lease and maintenance of indoor and outdoor digital product signage. The company offers LED display systems for use by sports arenas and stadiums; financial institutions, including brokerage firms, banks, energy companies, insurance companies, and mutual fund companies; educational institutions; outdoor advertising companies; corporate and government communication centers; retail outlets; casinos, racetracks and other gaming establishments; airports, train stations, bus terminals, and other transportation facilities; movie theatres; and health maintenance organizations, as well as in various other applications. It also provides TLVision, which consists of full-color video products for use in posting alphanumeric data and displaying of full HD video; and turnkey installation and support services. The company markets its products through direct sales representatives, and a network of independent dealers and distributors in the United States and Canada; and internal salespeople and independent distributors in the rest of North America, Europe, the Middle East, South America, Africa, the Far East, and Australia. Trans-Lux Corporation was incorporated in 1920 and is headquartered in New York, New York. Trans-Lux Corporation operates as a subsidiary of Unilumin North America Inc.

About Fabrinet

Fabrinet provides optical packaging and precision optical, electro-mechanical, and electronic manufacturing services in North America, the Asia-Pacific, and Europe. The company offers a range of advanced optical and electro-mechanical capabilities in the manufacturing process, including process design and engineering, supply chain management, manufacturing, printed circuit board assembly, advanced packaging, integration, final assembly, and testing. Its products include switching products, including reconfigurable optical add-drop multiplexers, optical amplifiers, modulators, and other optical components and modules that enable network managers to route voice, video, and data communications traffic through fiber optic cables at various wavelengths, speeds, and over various distances. The company's products also comprise tunable lasers, transceivers, and transponders; and active optical cables, which provide high-speed interconnect capabilities for data centers and computing clusters, as well as Infiniband, Ethernet, fiber channel, and optical backplane connectivity. In addition, it provides solid state, diode-pumped, gas, and fiber lasers used in semiconductor processing, biotechnology and medical device, metrology, and material processing industries; and differential pressure, micro-gyro, fuel, and other sensors used in automobiles, as well as non-contact temperature measurement sensors for the medical industry. Further, the company designs and fabricates application-specific crystals, lenses, prisms, mirrors, laser components, and substrates; and other custom and standard borosilicate, clear fused quartz, and synthetic fused silica glass products. It serves original equipment manufacturers of optical communication components, modules and sub-systems, industrial lasers, automotive components, medical devices, and sensors. The company was incorporated in 1999 and is based in Grand Cayman, the Cayman Islands.