Critical Analysis: Recon Technology (NASDAQ:RCON) and Franks International (NASDAQ:FI)

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Recon Technology (NASDAQ:RCON) and Franks International (NYSE:FI) are both small-cap oils/energy companies, but which is the superior business? We will compare the two businesses based on the strength of their analyst recommendations, earnings, dividends, risk, institutional ownership, profitability and valuation.

Volatility and Risk

Recon Technology has a beta of 1.87, indicating that its stock price is 87% more volatile than the S&P 500. Comparatively, Franks International has a beta of 1.39, indicating that its stock price is 39% more volatile than the S&P 500.

Institutional and Insider Ownership

0.2% of Recon Technology shares are owned by institutional investors. Comparatively, 38.4% of Franks International shares are owned by institutional investors. 28.0% of Recon Technology shares are owned by company insiders. Comparatively, 18.2% of Franks International shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Profitability

This table compares Recon Technology and Franks International’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Recon Technology N/A N/A N/A
Franks International -13.96% -7.65% -6.70%

Analyst Recommendations

This is a breakdown of current ratings and price targets for Recon Technology and Franks International, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Recon Technology 0 0 1 0 3.00
Franks International 1 5 2 0 2.13

Recon Technology presently has a consensus target price of $2.00, indicating a potential upside of 150.00%. Franks International has a consensus target price of $7.78, indicating a potential upside of 31.71%. Given Recon Technology’s stronger consensus rating and higher possible upside, analysts plainly believe Recon Technology is more favorable than Franks International.

Valuation and Earnings

This table compares Recon Technology and Franks International’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Recon Technology $12.80 million 0.73 -$6.65 million N/A N/A
Franks International $522.49 million 2.55 -$90.73 million ($0.42) -14.07

Recon Technology has higher earnings, but lower revenue than Franks International.

Summary

Recon Technology beats Franks International on 8 of the 12 factors compared between the two stocks.

Recon Technology Company Profile

Recon Technology, Ltd. provides hardware, software, and on-site services to companies in the petroleum mining and extraction industry in the People's Republic of China. The company offers equipment, tools, and other hardware related to oilfield production and management, and transportation; and develops and sells industrial automation control and information solutions. It also provides oil and gas production enhancing techniques comprising packers of fracturing; production packers; sand prevention in oil and water wells; water locating and plugging techniques; fissure shaper; fracture acidizing technique; and electronic broken-down service to resolve block-up and freezing problems. In addition, the company offers automation systems and services, including pumping unit controller that monitors the pumping units and collects data; RTU to monitor natural gas wells and collect gas well pressure data; wireless dynamometers and wireless pressure gauges; electric multi-way valves for oilfield metering station flow control; and natural gas flow computer systems. Further, it provides Recon SCADA oilfield monitor and data acquisition system for supervision and data collection; EPC service of pipeline SCADA system for pipeline monitoring and data acquisition; EPC service of oil and gas wells SCADA system for monitoring and data acquisition of oil wells and natural gas wells; EPC service of oilfield video surveillance and control system to control the oil and gas wellhead and measurement station areas; and technique service for digital oilfield transformation. Additionally, the company offers oilfield waste water treatment solutions and related chemicals; and oily sludge disposal solutions. Recon Technology, Ltd. was incorporated in 2007 and is headquartered in Beijing, the People's Republic of China.

Franks International Company Profile

Frank's International N.V. provides various engineered tubular services for the oil and gas exploration and production, and oilfield services companies in the United States, Europe, the Middle East, Africa, Latin America, the Asia Pacific, and internationally. The company operates through four segments: International Services, U.S. Services, Tubular Sales, and Blackhawk. Its tubular services include the handling and installation of multiple joints of pipe to establish a cased wellbore; and the installation of smaller diameter pipe inside a cased wellbore to provide a conduit for produced oil and gas to reach the surface. The company also designs, manufactures, and sells outside diameter (OD) pipes, connectors, and casing attachments; and provides specialized fabrication and welding services in support of deep water projects, including drilling and production risers, flowlines and pipeline end terminations, and long length tubulars for use as caissons or pilings. In addition, it offers specialty well construction and well intervention services and products; and distributes OD pipes manufactured by third parties. Frank's International N.V. was founded in 1938 and is headquartered in Den Helder, the Netherlands.

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