Contrasting Sequenom (SQNM) and Varex Imaging (VREX)

Sequenom (NASDAQ: SQNM) and Varex Imaging (NASDAQ:VREX) are both small-cap healthcare companies, but which is the superior investment? We will contrast the two companies based on the strength of their risk, analyst recommendations, profitability, valuation, dividends, institutional ownership and earnings.

Institutional & Insider Ownership

46.0% of Sequenom shares are owned by institutional investors. Comparatively, 92.8% of Varex Imaging shares are owned by institutional investors. 3.1% of Sequenom shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Profitability

This table compares Sequenom and Varex Imaging’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Sequenom -21.54% N/A -25.05%
Varex Imaging N/A N/A N/A

Earnings & Valuation

This table compares Sequenom and Varex Imaging’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Sequenom N/A N/A N/A ($0.35) -6.83
Varex Imaging $698.10 million 2.10 $51.60 million N/A N/A

Varex Imaging has higher revenue and earnings than Sequenom.

Analyst Ratings

This is a summary of current recommendations for Sequenom and Varex Imaging, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Sequenom 0 0 0 0 N/A
Varex Imaging 1 0 1 0 2.00

Varex Imaging has a consensus target price of $36.00, suggesting a potential downside of 7.81%. Given Varex Imaging’s higher possible upside, analysts clearly believe Varex Imaging is more favorable than Sequenom.

Summary

Varex Imaging beats Sequenom on 6 of the 7 factors compared between the two stocks.

About Sequenom

Sequenom, Inc. is a life sciences company. The Company serves patients and physicians by providing early patient management information. The Company operates through Sequenom Laboratories segment. It conducts its business as a molecular diagnostics clinical laboratory located in San Diego, California and Raleigh-Durham, North Carolina. Its testing focus is on prenatal health that includes molecular-based laboratory developed tests (LDTs). The Company’s diagnostic services are provided through its subsidiary, Sequenom Center for Molecular Medicine LLC (SCMM), doing business as Sequenom Laboratories. Sequenom Laboratories develops and validates its tests to be used as a testing service to physicians. Sequenom Laboratories is focused on developing and offering a menu of tests for prenatal continuum of care. The Sequenom Laboratories’ test offerings in the prenatal market include MaterniT21 PLUS LDT, HerediT CF test, SensiGene RhD test, VisibiliT test and Test Send-out Agreements.

About Varex Imaging

Varex Imaging Corporation is a supplier of medical X-ray tubes and image processing solutions. The Company’s segments include Medical and Industrial. The X-ray imaging system manufacturers use the Company’s components for medical imaging, cargo screening and border security, to detect, diagnose and protect. The Medical business segment designs, manufactures, sells and services X-ray imaging components for use in a range of applications, including radiographic or fluoroscopic imaging, mammography, special procedures, computed tomography, radiation therapy and computer-aided detection. The Industrial business segment designs, manufactures, sells and services products for use in security and industrial inspection applications, such as cargo screening at ports and borders and non-destructive examination in a range of applications.

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