Financial Analysis: Orchestra BioMed (NASDAQ:OBIO) versus Westaim (OTCMKTS:WEDXF)

Orchestra BioMed (NASDAQ:OBIO) and Westaim (OTCMKTS:WEDXF) are both small-cap medical companies, but which is the better investment? We will contrast the two businesses based on the strength of their valuation, risk, earnings, dividends, analyst recommendations, institutional ownership and profitability.

Analyst Ratings

This is a summary of current ratings and recommmendations for Orchestra BioMed and Westaim, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Orchestra BioMed	0	0	2	0	3.00
Westaim	0	0	0	0	N/A

Orchestra BioMed currently has a consensus price target of $17.00, indicating a potential upside of 148.18%. Given Orchestra BioMed’s higher possible upside, equities research analysts plainly believe Orchestra BioMed is more favorable than Westaim.

Risk & Volatility

Orchestra BioMed has a beta of 0.41, meaning that its stock price is 59% less volatile than the S&P 500. Comparatively, Westaim has a beta of 0.48, meaning that its stock price is 52% less volatile than the S&P 500.

Profitability

This table compares Orchestra BioMed and Westaim’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Orchestra BioMed	-2,330.46%	-70.18%	-49.17%
Westaim	1,323.83%	22.34%	20.94%

Institutional & Insider Ownership

53.6% of Orchestra BioMed shares are held by institutional investors. 6.7% of Orchestra BioMed shares are held by insiders. Comparatively, 4.2% of Westaim shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Valuation & Earnings

This table compares Orchestra BioMed and Westaim’s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Orchestra BioMed	$2.76 million	88.83	-$49.12 million	($1.48)	-4.63
Westaim	$8.63 million	44.26	$183.98 million	$0.81	3.68

Westaim has higher revenue and earnings than Orchestra BioMed. Orchestra BioMed is trading at a lower price-to-earnings ratio than Westaim, indicating that it is currently the more affordable of the two stocks.

Summary

Westaim beats Orchestra BioMed on 7 of the 12 factors compared between the two stocks.

About Orchestra BioMed

Orchestra BioMed Holdings, Inc. operates as a biomedical innovation company. The company's flagship product candidates include BackBeat Cardiac Neuromodulation Therapy (CNT) for the treatment of hypertension (HTN); and Virtue Sirolimus AngioInfusion Balloon (SAB) for the treatment of atherosclerotic artery disease. Its products also comprise FreeHold devices and minimally invasive surgery devices. The company has a collaboration agreement with Medtronic, Inc. for the development and commercialization of BackBeat CNT for the treatment of HTN in patients indicated for a cardiac pacemaker; and a strategic collaboration with Terumo Medical Corporation for the development and commercialization of Virtue SAB for the treatment of coronary and peripheral artery disease. Orchestra BioMed Holdings, Inc. is based in New Hope, Pennsylvania.

About Westaim

The Westaim Corporation is a private equity firm specializing in direct and indirect investments through acquisitions, joint ventures, secondary investments both direct and indirect, fund of fund investments, and other arrangements. For direct investments, the firm invests in early venture, mid venture, late venture, middle market, later stage, mature, emerging growth, PIPEs, and buyout transactions. For fund of fund investments, it seeks to invest in private equity funds, venture capital funds, and hedge funds. The firm seeks to provide long term capital to businesses operating in the global financial services industry. It typically acquires controlling interests in businesses. The firm seeks to acquire debt, equity, or derivative securities of both public and private companies. It invests with the objective of providing its shareholders with capital appreciation and real wealth preservation. The firm seeks to provide its portfolio companies with advisory services including, but not limited to, advice on capital allocation, financing strategy, performance measurement and merger and acquisition support. It also seeks to partner with like-minded providers of third party capital to help supplement the firm's own capital, when completing acquisitions. The firm generally seeks to hold its investments for seven to 15 years. The Westaim Corporation was founded in 1996 and is based in Toronto, Canada.