Analyzing Silicom (NASDAQ:SILC) and China Techfaith Wireless Communication Technology (OTCMKTS:CNTFY)

China Techfaith Wireless Communication Technology (OTCMKTS:CNTFY) and Silicom (NASDAQ:SILC) are both small-cap technology companies, but which is the better stock? We will compare the two companies based on the strength of their institutional ownership, risk, valuation, analyst recommendations, earnings, dividends and profitability.

Insider & Institutional Ownership

52.8% of Silicom shares are owned by institutional investors. 33.3% of China Techfaith Wireless Communication Technology shares are owned by company insiders. Comparatively, 25.4% of Silicom shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Valuation and Earnings

This table compares China Techfaith Wireless Communication Technology and Silicom”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
China Techfaith Wireless Communication Technology	N/A	N/A	N/A	N/A	N/A
Silicom	$61.93 million	3.91	-$11.48 million	($1.71)	-24.63

China Techfaith Wireless Communication Technology has higher earnings, but lower revenue than Silicom.

Analyst Ratings

This is a summary of current recommendations and price targets for China Techfaith Wireless Communication Technology and Silicom, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
China Techfaith Wireless Communication Technology	0	0	0	0	0.00
Silicom	1	0	1	0	2.00

Silicom has a consensus target price of $60.00, suggesting a potential upside of 42.45%. Given Silicom’s stronger consensus rating and higher probable upside, analysts plainly believe Silicom is more favorable than China Techfaith Wireless Communication Technology.

Profitability

This table compares China Techfaith Wireless Communication Technology and Silicom’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
China Techfaith Wireless Communication Technology	N/A	N/A	N/A
Silicom	-12.98%	-8.37%	-6.26%

Volatility & Risk

China Techfaith Wireless Communication Technology has a beta of 1.68, indicating that its stock price is 68% more volatile than the S&P 500. Comparatively, Silicom has a beta of 1.55, indicating that its stock price is 55% more volatile than the S&P 500.

About China Techfaith Wireless Communication Technology

China TechFaith Wireless Communication Technology Limited engages in the original design and development of specialized mobile handsets for consumers and enterprises in the People's Republic of China and internationally. It operates through Mobile Phone Business and Real Estate segments. The company offers handset design services through outsourcing of EMS providers who engage in assembly and manufacturing operations; and offer testing services of the assembled printed circuit boards, systems, and subsystems for Chinese mobile handset brand owners and international mobile handset brand owners. It also provides feature phones, smart phones, ruggedized phones, wireless modules, smart pads, and wireless software and applications, as well as other electronic components, such as industrial wireless devices. In addition, the company sells mobile handset products under the Tecface, 17FOX, and MOBIFOX brands. Further, it owns, develops, operates, and manages commercial real estate properties. The company was founded in 2002 and is headquartered in Beijing, the People's Republic of China.

About Silicom

Silicom Ltd., together with its subsidiaries, designs, manufactures, markets, and supports networking and data infrastructure solutions for servers, server-based systems, and communications devices. It offers server network interface cards; and smart cards, such as smart server adapters, which include redirector and switching cards, encryption and data compression hardware acceleration cards, forward error correction acceleration and offloading cards, time synchronization cards, and field programmable gate array-based cards. The company also provides virtualized and universal customer-premises equipment; and edge devices for SD-WAN, secure access service edge, Telco dedicated routers, and NFV deployments. It serves original equipment manufacturing, cloud, telco, mobile, and related service provider markets. The company operates in the United States, North America, Israel, Europe, and the Asia Pacific. Silicom Ltd. was incorporated in 1987 and is headquartered in Kfar Saba, Israel.