Reviewing ARM (NASDAQ:ARM) & NeoMagic (OTCMKTS:NMGC)

ARM (NASDAQ:ARM) and NeoMagic (OTCMKTS:NMGC) are both computer and technology companies, but which is the better investment? We will compare the two companies based on the strength of their dividends, risk, institutional ownership, analyst recommendations, earnings, valuation and profitability.

Profitability

This table compares ARM and NeoMagic’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
ARM	18.13%	13.69%	9.70%
NeoMagic	N/A	N/A	N/A

Risk & Volatility

ARM has a beta of 4.67, meaning that its stock price is 367% more volatile than the S&P 500. Comparatively, NeoMagic has a beta of 0.38, meaning that its stock price is 62% less volatile than the S&P 500.

Insider and Institutional Ownership

7.5% of ARM shares are owned by institutional investors. 12.7% of NeoMagic shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Valuation and Earnings

This table compares ARM and NeoMagic”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
ARM	$3.54 billion	45.03	$306.00 million	$0.60	253.18
NeoMagic	N/A	N/A	N/A	N/A	N/A

ARM has higher revenue and earnings than NeoMagic.

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for ARM and NeoMagic, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
ARM	2	6	18	1	2.67
NeoMagic	0	0	0	0	0.00

ARM currently has a consensus price target of $150.32, suggesting a potential downside of 1.05%. Given ARM’s stronger consensus rating and higher possible upside, equities research analysts plainly believe ARM is more favorable than NeoMagic.

Summary

ARM beats NeoMagic on 10 of the 11 factors compared between the two stocks.

About ARM

Arm Holdings plc architects, develops, and licenses central processing unit products and related technologies for semiconductor companies and original equipment manufacturers rely on to develop products. It offers microprocessors, systems intellectual property (IPs), graphics processing units, physical IP and associated systems IPs, software, tools, and other related services. Its products are used in various markets, such as automotive, computing infrastructure, consumer technologies, and Internet of things. The company operates in the United States, the People's Republic of China, Taiwan, South Korea, and internationally. The company was founded in 1990 and is headquartered in Cambridge, the United Kingdom. Arm Holdings plc operates as a subsidiary of Kronos II LLC.

About NeoMagic

NeoMagic Corporation designs and delivers semiconductors and software solutions for video, television, imaging, graphic, and audio devices. It offers microcontrollers; horizon digital picture frame and digital mobile TV solutions; and SOC processors, such as application processors and Neomobile TV solutions. The company, through its MercadoMagico.com division, operates an e-Commerce platform that allows user to buy and sell products from one another or buy premium electronic products. It sells its applications processors under the MiMagic brand name. The company was founded in 1993 and is based in Milpitas, California.