Critical Review: Inseego (INSG) & Napco Security Technologies (NSSC)

Inseego (NASDAQ: INSG) and Napco Security Technologies (NASDAQ:NSSC) are both small-cap computer and technology companies, but which is the better business? We will contrast the two businesses based on the strength of their earnings, risk, dividends, institutional ownership, profitability, valuation and analyst recommendations.

Profitability

This table compares Inseego and Napco Security Technologies’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Inseego -17.89% N/A -24.03%
Napco Security Technologies 7.96% 12.30% 10.20%

Institutional and Insider Ownership

7.7% of Inseego shares are held by institutional investors. Comparatively, 28.9% of Napco Security Technologies shares are held by institutional investors. 4.1% of Inseego shares are held by company insiders. Comparatively, 37.8% of Napco Security Technologies shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Valuation & Earnings

This table compares Inseego and Napco Security Technologies’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Inseego $219.30 million 0.50 -$45.73 million ($0.78) -2.35
Napco Security Technologies $87.37 million 2.53 $5.59 million N/A N/A

Napco Security Technologies has lower revenue, but higher earnings than Inseego.

Analyst Ratings

This is a summary of recent ratings and price targets for Inseego and Napco Security Technologies, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Inseego 0 1 1 0 2.50
Napco Security Technologies 0 0 1 0 3.00

Inseego currently has a consensus price target of $2.13, indicating a potential upside of 16.12%. Napco Security Technologies has a consensus price target of $14.00, indicating a potential upside of 18.64%. Given Napco Security Technologies’ stronger consensus rating and higher probable upside, analysts plainly believe Napco Security Technologies is more favorable than Inseego.

Risk and Volatility

Inseego has a beta of 0.42, suggesting that its share price is 58% less volatile than the S&P 500. Comparatively, Napco Security Technologies has a beta of 0.37, suggesting that its share price is 63% less volatile than the S&P 500.

Summary

Napco Security Technologies beats Inseego on 10 of the 12 factors compared between the two stocks.

Inseego Company Profile

Inseego Corp., together with its subsidiaries, provides software-as-a-service (SaaS), Internet of Things (IoT), and mobile solutions worldwide. The company sells SaaS, software, and service solutions across multiple IoT vertical markets, including fleet management and vehicle telematics, aviation, usage-based insurance, stolen vehicle recovery, asset tracking and monitoring, business connectivity, and subscription management. Its SaaS delivery platforms include Ctrack platforms, which provide fleet, vehicle, aviation, asset, and other telematics applications; and Device Management Solutions, a hosted SaaS platform that helps organizations to manage the selection, deployment, and spend of their wireless assets. The company also provides a range of wireless hardware products address various markets, such as fleet and commercial telematics, after-market telematics, smart city infrastructure management, and remote monitoring and control, as well as security, connected home, and wireless surveillance systems. Its hardware products include mobile hotspots under MiFi brand name; and wireless routers, USB modems, and telematics and mobile tracking hardware devices supported by applications software and cloud services. Inseego Corp. serves wireless operators, distributors, direct sales force, original equipment manufacturers, and other companies. The company was formerly known as Novatel Wireless Inc. and changed its name to Inseego Corp. in November 2016. Inseego Corp. was founded in 1996 and is headquartered in San Diego, California.

Napco Security Technologies Company Profile

Napco Security Technologies, Inc. manufactures and sells security products and software worldwide. The company offers access control systems, door security products, intrusion and fire alarm systems, and video surveillance systems for commercial, residential, institutional, industrial, and governmental applications. Its access control systems include various types of identification readers, control panels, PC-based computers, and electronically activated door-locking devices; and door locking devices comprise microprocessor-based electronic door locks with push button, card readers and bio-metric operation, door alarms, mechanical door locks, and simple dead bolt locks. The company's alarm systems include automatic communicators, control panels, combination control panels/digital communicators and digital keypad systems, fire alarm control panels, and area detectors; and video surveillance systems comprise video cameras, control panels, video monitors, or PCs. It also buys and resells various identification readers, video cameras, PC-based computers, and peripheral equipment for access control and video surveillance systems; and markets peripheral and related equipment manufactured by other companies. The company markets and sells its products primarily to independent distributors, dealers, and installers of security equipment. Napco Security Technologies, Inc. was founded in 1969 and is headquartered in Amityville, New York.

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