Head-To-Head Analysis: Westaim (OTCMKTS:WEDXF) & AtriCure (NASDAQ:ATRC)

Westaim (OTCMKTS:WEDXF) and AtriCure (NASDAQ:ATRC) are both small-cap basic materials companies, but which is the superior stock? We will contrast the two businesses based on the strength of their valuation, risk, profitability, institutional ownership, dividends, earnings and analyst recommendations.

Analyst Recommendations

This is a summary of current ratings for Westaim and AtriCure, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Westaim	0	0	0	0	N/A
AtriCure	0	0	9	0	3.00

AtriCure has a consensus target price of $42.44, indicating a potential upside of 48.51%. Given AtriCure’s higher probable upside, analysts clearly believe AtriCure is more favorable than Westaim.

Profitability

This table compares Westaim and AtriCure’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Westaim	737.56%	12.54%	11.85%
AtriCure	-9.33%	-8.39%	-6.45%

Risk and Volatility

Westaim has a beta of 0.5, meaning that its share price is 50% less volatile than the S&P 500. Comparatively, AtriCure has a beta of 1.43, meaning that its share price is 43% more volatile than the S&P 500.

Earnings & Valuation

This table compares Westaim and AtriCure”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Westaim	$8.63 million	43.94	$183.98 million	$0.81	3.65
AtriCure	$429.95 million	3.16	-$30.44 million	($0.80)	-35.73

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

Insider and Institutional Ownership

99.1% of AtriCure shares are held by institutional investors. 4.2% of Westaim shares are held by insiders. Comparatively, 3.2% of AtriCure shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Summary

Westaim beats AtriCure on 8 of the 13 factors compared between the two stocks.

About Westaim

The Westaim Corporation is a private equity firm specializing in direct and indirect investments through acquisitions, joint ventures, secondary investments both direct and indirect, fund of fund investments, and other arrangements. For direct investments, the firm invests in early venture, mid venture, late venture, middle market, later stage, mature, emerging growth, PIPEs, and buyout transactions. For fund of fund investments, it seeks to invest in private equity funds, venture capital funds, and hedge funds. The firm seeks to provide long term capital to businesses operating in the global financial services industry. It typically acquires controlling interests in businesses. The firm seeks to acquire debt, equity, or derivative securities of both public and private companies. It invests with the objective of providing its shareholders with capital appreciation and real wealth preservation. The firm seeks to provide its portfolio companies with advisory services including, but not limited to, advice on capital allocation, financing strategy, performance measurement and merger and acquisition support. It also seeks to partner with like-minded providers of third party capital to help supplement the firm's own capital, when completing acquisitions. The firm generally seeks to hold its investments for seven to 15 years. The Westaim Corporation was founded in 1996 and is based in Toronto, Canada.

About AtriCure

AtriCure, Inc. develops, manufactures, and sells devices for surgical ablation of cardiac tissue, exclusion of the left atrial appendage, and temporarily blocking pain by ablating peripheral nerves to medical centers in the United States, Europe, the Asia-Pacific, and internationally. The company offers Isolator Synergy Clamps, single-use disposable radio frequency products; multifunctional pens and linear ablation devices, such as the MAX Pen device that enables surgeons to evaluate cardiac arrhythmias, perform temporary cardiac pacing, sensing, and stimulation, and ablate cardiac tissue with the same device; and the Coolrail device, which enables users to make longer linear lines of ablation. It also provides cryoICE Cryoablation System that enables the user to make linear ablations of varied lengths; EPi-Sense Systems, a single-use disposable device used for the treatment of symptomatic, drug-refractory, and long-standing persistent atrial fibrillation; cryoSPHERE probe, which provides temporary pain relief by applying cryothermic energy to targeted intercoastal peripheral nerves in the ribcage; AtriClip System, an implantable device coupled to a single-use disposable applier; and LARIAT System, a suture-based solution for soft-tissue closure. In addition, the company sells Lumitip dissectors to separate tissues to provide access to key anatomical structures that are targeted for ablation; Glidepath guides for placement of clamps; Subtle Cannula's to support access for EPi-Sense catheters; and various reusable cardiac surgery instruments. It markets and sells its products through independent distributors and direct sales personnel. The company was incorporated in 2000 and is headquartered in Mason, Ohio.