Comparing TranSwitch (OTCMKTS:TXCCQ) and Canaan (NASDAQ:CAN)

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

Institutional and Insider Ownership

70.1% of Canaan shares are held by institutional investors. 6.3% of TranSwitch shares are held by company insiders. Comparatively, 0.3% of Canaan shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Earnings and Valuation

This table compares TranSwitch and Canaan’s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
TranSwitch	N/A	N/A	N/A	N/A	N/A
Canaan	$191.34 million	1.55	-$414.15 million	($2.05)	-0.52

TranSwitch has higher earnings, but lower revenue than Canaan.

Volatility and Risk

TranSwitch has a beta of 14.7, suggesting that its share price is 1,370% more volatile than the S&P 500. Comparatively, Canaan has a beta of 3.09, suggesting that its share price is 209% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of current recommendations and price targets for TranSwitch and Canaan, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
TranSwitch	0	0	0	0	N/A
Canaan	0	0	2	0	3.00

Canaan has a consensus price target of $4.25, suggesting a potential upside of 300.94%.

Profitability

This table compares TranSwitch and Canaan’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
TranSwitch	N/A	N/A	N/A
Canaan	-192.95%	-75.57%	-57.68%

Summary

TranSwitch beats Canaan on 5 of the 8 factors compared between the two stocks.

About TranSwitch

TranSwitch Corporation, together with its subsidiaries, designs, develops, and supplies integrated circuit and intellectual property solutions that provide functionality for voice, data, and video communications equipment for the customer premises and network infrastructure markets. The company provides integrated multi-core network processor system-on-a-chip (SoC) solutions for fixed, 3G and 4G mobile, VoIP, and multimedia applications. It offers converged network infrastructure products, including infrastructure VoIP processors for wire-line and wireless carrier equipment; access VoIP processors; and EoS/EoPDH mappers and framers for carriers to transport data traffic over SONET, SDH, and PDH networks. The company also offers broadband customer premises equipment, such as connectivity solutions comprising HDMI, DisplayPort, MHL, HDP, Ethernet IP cores, and MHDP transceivers for consumer electronics, home network equipment, and industrial and automotive applications; and multi-service SoCs for customer premises equipment that support telephone voice, fax, and routing functionality over broadband access networks. TranSwitch Corporation sells its products to public network system original equipment manufacturers (OEMs), WAN and LAN equipment OEMs, Internet-oriented OEMs, and communications test and performance measurement equipment OEMs; and government, universities, and private laboratories. The company offers its products directly in North America, Taiwan, China, Japan, Korea, and Europe, as well as through a network of distributors in North America, Asia, and Europe. TranSwitch Corporation was founded in 1988 and is headquartered in Shelton, Connecticut. On November 21, 2013, TranSwitch Corporation filed a voluntary petition for liquidation under Chapter 7 in the U.S. Bankruptcy Court for the District of Connecticut.

About Canaan

Canaan Inc. engages in the research, design, and sale of integrated circuit (IC) final mining equipment products by integrating IC products for bitcoin mining and related components in the People's Republic of China. It is also involved in the assembly and distribution of mining equipment and spare parts. The company has operations in the United States, Australia, Kazakhstan, Hong Kong, Canada, Mainland China, Thailand, Sweden, and internationally. Canaan Inc. was founded in 2013 and is based in Singapore.