Critical Review: STAAR Surgical (NASDAQ:STAA) and Avitar (OTCMKTS:AVTI)

STAAR Surgical (NASDAQ:STAA) and Avitar (OTCMKTS:AVTI) are both medical companies, but which is the better business? We will contrast the two businesses based on the strength of their analyst recommendations, earnings, dividends, valuation, institutional ownership, profitability and risk.

Institutional and Insider Ownership

96.7% of STAAR Surgical shares are owned by institutional investors. 39.9% of STAAR Surgical shares are owned by company insiders. Comparatively, 7.4% of Avitar shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Analyst Ratings

This is a summary of current ratings for STAAR Surgical and Avitar, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
STAAR Surgical	2	6	3	0	2.09
Avitar	0	0	0	0	0.00

STAAR Surgical currently has a consensus price target of $27.81, indicating a potential downside of 0.56%. Given Avitar’s higher probable upside, analysts plainly believe Avitar is more favorable than STAAR Surgical.

Valuation and Earnings

This table compares STAAR Surgical and Avitar”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
STAAR Surgical	$239.44 million	5.82	-$80.45 million	($0.43)	-65.05
Avitar	N/A	N/A	N/A	N/A	N/A

Avitar has lower revenue, but higher earnings than STAAR Surgical.

Profitability

This table compares STAAR Surgical and Avitar’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
STAAR Surgical	-7.24%	3.31%	2.55%
Avitar	N/A	N/A	N/A

Summary

STAAR Surgical beats Avitar on 7 of the 9 factors compared between the two stocks.

About STAAR Surgical

STAAR Surgical Company, together with its subsidiaries, designs, develops, manufactures, markets, and sells implantable lenses for the eye, and companion delivery systems to deliver the lenses into the eye. The company provides implantable Collamer lens product family (ICLs) to treat visual disorders, such as myopia, hyperopia, astigmatism, and presbyopia. It markets its products to health care providers, including ophthalmic surgeons, vision and surgical centers, hospitals, government facilities, and distributors, as well as products are primarily used by ophthalmologists. The company sells its products directly through its sales representatives in the United States, Japan, Germany, Spain, Canada, the United Kingdom, and Singapore, as well as through own representatives and independent distributors in China, Korea, India, France, Benelux, Italy, and internationally. STAAR Surgical Company was incorporated in 1982 and is headquartered in Lake Forest, California.

About Avitar

Avitar, Inc. is a holding company which through its subsidiaries designs, develops, manufactures, and markets diagnostic test products and proprietary hydrophilic polyurethane foam disposables for medical, diagnostics, dental, and consumer applications in the United States. It offers ORALscreen 4 and ORALscreen DRUGOMETER, the oral fluid-based onsite assay systems, for detecting drugs of abuse, such as opiates, including heroin, morphine, codeine, and synthetic opiates comprising oxycocone-oxycontin, percoset, and hydrocodone-vicodin; cocaine such as crack; marijuana; and methamphetamines, including meth and ecstasy. The company also provides foam disposable products including medical-grade hydrophilic polyurethane foam disposables such as wound dressings comprising Hydrasorb, a wound dressing product for exudating wounds; and various custom foam products comprising a sinus dressing and a device used by astronauts for relieving ear pressure while in a pressurized space suit. In addition, it develops specialty wound dressings for the cardiac catheter lab market, as well as the Illizarov Dressing used for dressing external bone fixators in orthopedic procedures. The company markets its products and services to employers, diagnostic test distributors, medical supply companies, governmental agencies, schools, and corporations through direct sales force and strategic partners, as well as through a network of distributors. Avitar, Inc. was founded in 1986 and is based in Canton, Massachusetts with Additional office in Calgary, Canada.