Head to Head Contrast: Westaim (OTCMKTS:WEDXF) and OrthoPediatrics (NASDAQ:KIDS)

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

Institutional & Insider Ownership

69.1% of OrthoPediatrics shares are held by institutional investors. 4.2% of Westaim shares are held by insiders. Comparatively, 31.8% of OrthoPediatrics shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Analyst Ratings

This is a breakdown of current ratings and target prices for Westaim and OrthoPediatrics, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Westaim	0	0	0	0	0.00
OrthoPediatrics	0	1	3	0	2.75

OrthoPediatrics has a consensus target price of $37.25, indicating a potential upside of 46.94%. Given OrthoPediatrics’ stronger consensus rating and higher probable upside, analysts clearly believe OrthoPediatrics is more favorable than Westaim.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Westaim	284.74%	7.76%	7.29%
OrthoPediatrics	-15.00%	-5.78%	-4.80%

Volatility & Risk

Westaim has a beta of 0.39, meaning that its stock price is 61% less volatile than the S&P 500. Comparatively, OrthoPediatrics has a beta of 1.22, meaning that its stock price is 22% more volatile than the S&P 500.

Earnings and Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Westaim	$8.63 million	55.08	$183.98 million	$1.74	12.79
OrthoPediatrics	$204.73 million	3.01	-$20.97 million	($1.63)	-15.55

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

OrthoPediatrics Corp., a medical device company, engages in designing, developing, and marketing anatomically appropriate implants, instruments, and specialized braces for children with orthopedic conditions in the United States and internationally. The company offers pediatric trauma and deformity correction products; scoliosis procedures for the treatment of spinal deformity; and sports medicine and other products. Its products comprise PediLoc, PediPlates, cannulated screws, PediFlex nail, PediNail, PediLoc Tibia, ACL Reconstruction System, Locking Cannulated Blade, Locking Proximal Femur, Spica Tables, RESPONSE Spine, BandLoc, Pediguard, Pediatric Nailing Platform | Femur, Devise Rail, Orthex, The Fassier-Duval Telescopic Intramedullary System, SLIMTM Nail, The GAP Nail, The Free Gliding SCFE Screw System, GIROTM Growth Modulation System, PNP Tibia System, ApiFix Mid-C System, and Mitchell Ponseti. The company serves pediatric orthopedic market, as well as pediatric orthopedic surgeons and caregivers. OrthoPediatrics Corp. was founded in 2006 and is headquartered in Warsaw, Indiana.