Critical Analysis: H2O Innovation (HEOFF) and Cesca Therapeutics (KOOL)

H2O Innovation (OTCMKTS: HEOFF) and Cesca Therapeutics (NASDAQ:KOOL) are both small-cap industrial products companies, but which is the better investment? We will compare the two businesses based on the strength of their dividends, valuation, profitability, earnings, risk, institutional ownership and analyst recommendations.

Analyst Recommendations

This is a breakdown of current ratings and price targets for H2O Innovation and Cesca Therapeutics, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
H2O Innovation 0 0 2 0 3.00
Cesca Therapeutics 0 1 0 0 2.00

H2O Innovation presently has a consensus price target of $2.00, suggesting a potential upside of 146.91%. Given H2O Innovation’s stronger consensus rating and higher possible upside, research analysts clearly believe H2O Innovation is more favorable than Cesca Therapeutics.

Profitability

This table compares H2O Innovation and Cesca Therapeutics’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
H2O Innovation -5.86% -7.19% -4.07%
Cesca Therapeutics -43.35% -17.76% -11.64%

Insider and Institutional Ownership

2.4% of Cesca Therapeutics shares are owned by institutional investors. 3.9% of Cesca Therapeutics shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Earnings & Valuation

This table compares H2O Innovation and Cesca Therapeutics’ top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
H2O Innovation $62.38 million 0.52 -$3.86 million ($0.04) -20.25
Cesca Therapeutics $14.52 million 1.27 -$29.09 million N/A N/A

H2O Innovation has higher revenue and earnings than Cesca Therapeutics.

Volatility & Risk

H2O Innovation has a beta of 0.36, suggesting that its share price is 64% less volatile than the S&P 500. Comparatively, Cesca Therapeutics has a beta of -0.76, suggesting that its share price is 176% less volatile than the S&P 500.

Summary

H2O Innovation beats Cesca Therapeutics on 9 of the 12 factors compared between the two stocks.

About H2O Innovation

H2O Innovation Inc. provides integrated water treatment solutions based on membrane filtration technology in Canada, the United States, Spain, China, the United Arab Emirates, Mexico, France, Egypt, and internationally. It designs, manufactures, and markets systems and equipment for the production of drinking water and industrial process water, reclamation and reuse of water, and desalination of seawater and treatment of wastewater. The company also provides products, as well as membrane filtration systems' spare parts, such as pumps, valves, membranes, filters, media, and other replacement parts of water or wastewater treatment system; and specialty chemicals for membrane pre-treatment applications, as well as develops blends for maintenance, preservation, and cleaning of membrane systems. In addition, it offers specialty coagulants for conventional and membrane filtration systems, as well as flocculants; a line of couplings and fittings for industrial and municipal applications; cartridge filter housings, bag filters, strainers, and cartridge filter elements; and maple syrup products and equipment, such as evaporators, reverse osmosis separators, monitoring solutions, membranes, fittings, tubing, tanks, press filters, and other products related to the maple syrup industry. Further, the company provides operation and maintenance services for water and wastewater treatment systems; and public works services, which include street maintenance, drainage maintenance, and solid waste collection, as well as leases containerized water or wastewater treatment systems, and pilot units. It primarily serves municipalities and local governments; communities and private developments; energy and power plants; food and beverages industries; oil and gas markets; mining and workers camps; and other industrial segments. The company was founded in 2000 and is headquartered in Quebec City, Canada. H2O Innovation Inc. is a subsidiary of Amsterdams Effectenkantoor B.V.

About Cesca Therapeutics

Cesca Therapeutics Inc. is clinical-stage biotechnology company. The Company develops and markets integrated cellular therapies and delivery systems. The Company is engaged in developing and manufacturing of automated blood and bone marrow processing systems that enable the separation, processing and preservation of cell and tissue therapy products. The Company focuses on the business of research, development and commercialization of autologous cell-based therapeutics for use in the regenerative medicine industry. The Company’s therapeutic development initiatives focuses on the fields of cardiovascular medicine and orthopedic regeneration. The Company offers a range of products, such as SurgWerks System, CellWerks System, AutoXpress System (AXP), MarrowXpress System (MXP), BioArchive System, and manual bag sets for use in the processing and cryogenic storage of cord blood.

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