Analyzing Children’s Place (NASDAQ:PLCE) & ARKO (NASDAQ:ARKO)

Children’s Place (NASDAQ:PLCE) and ARKO (NASDAQ:ARKO) are both small-cap consumer discretionary companies, but which is the superior investment? We will contrast the two companies based on the strength of their profitability, earnings, dividends, analyst recommendations, risk, valuation and institutional ownership.

Insider and Institutional Ownership

78.3% of ARKO shares are held by institutional investors. 0.9% of Children’s Place shares are held by insiders. Comparatively, 21.9% of ARKO shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of current recommendations and price targets for Children’s Place and ARKO, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Children’s Place	1	2	0	0	1.67
ARKO	1	1	1	0	2.00

Children’s Place currently has a consensus price target of $3.25, suggesting a potential upside of 215.53%. ARKO has a consensus price target of $14.50, suggesting a potential upside of 263.41%. Given ARKO’s stronger consensus rating and higher probable upside, analysts plainly believe ARKO is more favorable than Children’s Place.

Earnings and Valuation

This table compares Children’s Place and ARKO”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Children’s Place	$1.21 billion	0.02	-$88.26 million	($5.99)	-0.17
ARKO	$7.64 billion	0.06	$22.74 million	$0.07	57.00

ARKO has higher revenue and earnings than Children’s Place. Children’s Place is trading at a lower price-to-earnings ratio than ARKO, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Children’s Place and ARKO’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Children’s Place	-11.82%	N/A	-14.84%
ARKO	0.19%	4.02%	0.41%

Risk & Volatility

Children’s Place has a beta of 1.98, suggesting that its share price is 98% more volatile than the S&P 500. Comparatively, ARKO has a beta of 0.93, suggesting that its share price is 7% less volatile than the S&P 500.

Summary

ARKO beats Children’s Place on 13 of the 14 factors compared between the two stocks.

About Children’s Place

The Children’s Place, Inc. engages in the provision of apparel, footwear, accessories, and other items for children. The firm also designs contracts to manufacture and sell fashionable and value-priced merchandise under the brand names of The Children’s Place, Baby Place, and Gymboree. It operates through The Children’s Place U.S. and The Children’s Place International segments. The Children’s Place U.S. segment refers to the company’s U.S. and Puerto Rico-based stores and revenue from its U.S. based wholesale business. The Children’s Place International segment is involved in the Canadian-based stores, revenue from the company’s Canadian-based wholesale business, as well as revenue from international franchisees. The company was founded by David Pulver and Clinton A. Clark in 1969 and is headquartered in Secaucus, NJ.

About ARKO

Arko Corp. operates convenience stores in the United States. It operates through Retail, Wholesale, Fleet Fueling, and GPMP segments. The Retail segment engages in the sale of fuel and merchandise to retail consumers. Its Wholesale segment supplies fuel to third-party dealers and consignment agents. The Fleet Fueling segment supplies fuel to proprietary and third-party cardlock, and issuance of proprietary fuel cards. Its GPMP segment supplies fuel to retail and wholesale segments. The company is based in Richmond, Virginia.