Financial Analysis: Latham Group (NASDAQ:SWIM) & Newton Golf (NASDAQ:NWTG)

Newton Golf (NASDAQ:NWTG) and Latham Group (NASDAQ:SWIM) are both small-cap consumer discretionary companies, but which is the superior investment? We will compare the two businesses based on the strength of their institutional ownership, dividends, earnings, risk, valuation, profitability and analyst recommendations.

Risk & Volatility

Newton Golf has a beta of 2.47, suggesting that its stock price is 147% more volatile than the S&P 500. Comparatively, Latham Group has a beta of 1.66, suggesting that its stock price is 66% more volatile than the S&P 500.

Profitability

This table compares Newton Golf and Latham Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Newton Golf	-124.42%	-476.84%	-260.68%
Latham Group	0.92%	1.31%	0.63%

Earnings & Valuation

This table compares Newton Golf and Latham Group”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Newton Golf	$8.14 million	0.53	-$6.02 million	($1.93)	-0.48
Latham Group	$545.91 million	1.41	$11.12 million	$0.05	130.64

Latham Group has higher revenue and earnings than Newton Golf. Newton Golf is trading at a lower price-to-earnings ratio than Latham Group, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a breakdown of current ratings for Newton Golf and Latham Group, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Newton Golf	1	0	0	0	1.00
Latham Group	3	3	1	0	1.71

Latham Group has a consensus target price of $7.83, indicating a potential upside of 19.92%. Given Latham Group’s stronger consensus rating and higher possible upside, analysts clearly believe Latham Group is more favorable than Newton Golf.

Insider & Institutional Ownership

0.5% of Newton Golf shares are owned by institutional investors. Comparatively, 84.0% of Latham Group shares are owned by institutional investors. 8.4% of Newton Golf shares are owned by company insiders. Comparatively, 3.3% of Latham Group shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Summary

Latham Group beats Newton Golf on 12 of the 14 factors compared between the two stocks.

About Newton Golf

Sacks Parente Golf, Inc. (“SPG”) is a technology-forward golf company, with a growing portfolio of golf products, including putting instruments, golf shafts, golf grips, and other golf-related products. In April 2022, in consideration of our growth opportunities in shaft technologies, we expanded our manufacturing business to include advanced premium golf shafts by opening a new shaft manufacturing facility in St. Joseph, MO. We intend to manufacture and assemble substantially all products in the United States. We anticipate expanding into golf apparel and other golf related product lines to enhance our growth. Our future expansions may include broadening our offerings through mergers, acquisitions or internal developments of product lines that are complementary to our premium brand. Product Portfolio Characteristics We design, manufacture and sell technology-forward, high-quality golf equipment, which is comprised of putting instruments, golf shafts, golf grips and related product groups. We design our golf products to fit golfers of all skill levels, amateur and professional, and our products are designed with the goal of conforming to the Rules of Golf as published by the United States Golf Association (“USGA”) and the ruling authority (“The R&A”). Our Products Our equipment includes putting instruments, golf shafts and grips. Our putting instruments are generally made of steel, aluminum, titanium alloys, carbon fiber, tungsten, and various other materials, including our patented magnesium face plate technologies. All of our products are currently sold under the SPG brand, but we intend to private label and sell certain components to interested third parties. Our shaft and putter technology has been shown by The Golf Lab, a Canadian golf research and education provider, to improve players’ ability to make putts, feel of the putter head, stroke, face angle at impact, and consistency for distance control. Our management believes that our proprietary shaft designs can enhance the performance of players’ putters as well as drivers and other golf clubs. Further, our management believes that these innovative designs, along with our proprietary manufacturing techniques, create performance improvements over traditional golf shafts. We were formed in 2018 as Sacks Parente Golf Company, LLC, a Delaware limited liability company. On March 18th, 2022, we converted into a Delaware corporation named Sacks Parente Golf, Inc. Sacks Parente Golf, Inc. 551 Calle San Pablo Camarillo, CA.

About Latham Group

Latham Group, Inc. designs, manufactures, and markets in-ground residential swimming pools in North America, Australia, and New Zealand. It offers a portfolio of pools and related products, including in-ground swimming pools that include fiber glass and packaged pools; and pool covers and liners under the Latham, Narellan, CoverStar, Radiant, and GLI brand names. The company was formerly known as Latham Topco, Inc. and changed its name to Latham Group, Inc. in March 2021. Latham Group, Inc. was founded in 1956 and is headquartered in Latham, New York.