Analyzing Sapient (SAPE) and ModusLink Global Solutions (MLNK)

Sapient (NASDAQ: SAPE) and ModusLink Global Solutions (NASDAQ:MLNK) are both technology companies, but which is the better investment? We will contrast the two companies based on the strength of their analyst recommendations, institutional ownership, dividends, risk, profitability, valuation and earnings.

Risk and Volatility

Sapient has a beta of 1.23, suggesting that its stock price is 23% more volatile than the S&P 500. Comparatively, ModusLink Global Solutions has a beta of 0.87, suggesting that its stock price is 13% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current ratings and target prices for Sapient and ModusLink Global Solutions, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Sapient 0 0 0 0 N/A
ModusLink Global Solutions 0 1 0 0 2.00

ModusLink Global Solutions has a consensus target price of $8.00, indicating a potential upside of 367.84%. Given ModusLink Global Solutions’ higher possible upside, analysts plainly believe ModusLink Global Solutions is more favorable than Sapient.

Earnings and Valuation

This table compares Sapient and ModusLink Global Solutions’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Sapient N/A N/A N/A $0.57 43.82
ModusLink Global Solutions $436.62 million 0.22 -$25.82 million ($0.47) -3.64

Sapient has higher revenue, but lower earnings than ModusLink Global Solutions. ModusLink Global Solutions is trading at a lower price-to-earnings ratio than Sapient, indicating that it is currently the more affordable of the two stocks.

Insider and Institutional Ownership

56.6% of ModusLink Global Solutions shares are owned by institutional investors. 1.3% of ModusLink Global Solutions shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Profitability

This table compares Sapient and ModusLink Global Solutions’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Sapient 6.13% 14.00% 8.96%
ModusLink Global Solutions -5.92% -36.62% -8.36%

Summary

Sapient beats ModusLink Global Solutions on 5 of the 9 factors compared between the two stocks.

Sapient Company Profile

Sapient Corporation (Sapient) is a global services company, which helps clients leverage marketing and technology to transform their businesses. The Company operates in three business units: SapientNitro, Sapient Global Markets, and Sapient Government Services. SapientNitro provides integrated marketing and creative services, Web and interactive development, advertising, media planning and buying, strategic planning and marketing analytics, multi-channel commerce strategy and solutions, including a focus on mobile, and content and asset management strategies and solutions. Through this business unit, it combines multi-channel marketing and commerce. Sapient Global Markets provides integrated advisory, program management, analytics, technology and operations services to capital and commodity markets. Sapient Government Services provides consulting, technology, and marketing services to the United States government agencies and non-governmental organizations (NGOs).

ModusLink Global Solutions Company Profile

ModusLink Global Solutions, Inc. is a provider of supply chain and logistics services through its subsidiaries, ModusLink Corporation and ModusLink PTS, Inc. The Company provides services to companies in the consumer electronics, communications, computing, software, storage and retail industries. The Company operates through four segments: Americas, Asia, Europe and e-business. As of July 31, 2016, the Company operated in over 20 sites across North America, Europe and the Asia Pacific region. The Company’s Supply Chain Business operation’s solutions include material planning and factory supply; value-added warehousing and distribution; aftermarket services, including product returns management and product repair and recovery, and e-business, including e-commerce, contact center, entitlement management and financial management.

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