Analyzing SouthPeak Interactive (OTCMKTS:SOPK) and Portman Ridge Finance (NASDAQ:BCIC)

Portman Ridge Finance (NASDAQ:BCIC) and SouthPeak Interactive (OTCMKTS:SOPK) are both finance companies, but which is the better stock? We will compare the two companies based on the strength of their valuation, analyst recommendations, institutional ownership, dividends, profitability, earnings and risk.

Institutional and Insider Ownership

30.1% of Portman Ridge Finance shares are held by institutional investors. 2.1% of Portman Ridge Finance shares are held by company insiders. Comparatively, 45.6% of SouthPeak Interactive shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Analyst Recommendations

This is a summary of current ratings and recommmendations for Portman Ridge Finance and SouthPeak Interactive, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Portman Ridge Finance	0	1	0	0	2.00
SouthPeak Interactive	0	0	0	0	0.00

Given SouthPeak Interactive’s higher possible upside, analysts clearly believe SouthPeak Interactive is more favorable than Portman Ridge Finance.

Profitability

This table compares Portman Ridge Finance and SouthPeak Interactive’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Portman Ridge Finance	28.39%	12.45%	4.93%
SouthPeak Interactive	N/A	N/A	N/A

Valuation & Earnings

This table compares Portman Ridge Finance and SouthPeak Interactive”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Portman Ridge Finance	$62.43 million	2.54	-$5.93 million	$1.09	11.10
SouthPeak Interactive	N/A	N/A	N/A	N/A	N/A

SouthPeak Interactive has lower revenue, but higher earnings than Portman Ridge Finance.

Volatility and Risk

Portman Ridge Finance has a beta of 0.38, indicating that its share price is 62% less volatile than the S&P 500. Comparatively, SouthPeak Interactive has a beta of 3.19, indicating that its share price is 219% more volatile than the S&P 500.

Summary

Portman Ridge Finance beats SouthPeak Interactive on 6 of the 9 factors compared between the two stocks.

About Portman Ridge Finance

Portman Ridge Finance Corporation is a business development company specializing in investments in unitranche loans (including last out), first lien loans, second lien loans, subordinated debt, equity co-investment, buyout in middle market companies. It also makes acquisitions in businesses complementary to the firm’s business. It primarily invests in healthcare, cargo transport, manufacturing, industrial & environmental services, logistics & distribution, media & telecommunications, real estate, education, automotive, agriculture, aerospace/defense, packaging, electronics, finance, non-durable consumer, consumer products, business services, utilities, insurance, and food and beverage sectors. The fund typically invests $1 million to $20 million in its portfolio companies. It provides senior secured term loans from $2 million to $20 million maturing in five to seven years; second lien term loans from $5 million to $15 million maturing in six to eight years; senior unsecured loans $5 million to $23 million maturing in six to eight years; mezzanine loans from $5 million to $15 million maturing in seven to ten years; and equity investments from $1 to $5 million. The fund targets the companies with EBITDA between $5 million and $25 million. While investing in debt securities, it invests in those middle market firms with EBITDA between $10 million and $50 million and/or total debt between $25 million and $150 million. It invests in minority, and majority or control equity positions alongside its private equity sponsor partners.

About SouthPeak Interactive

SouthPeak Interactive Corporation develops, markets, and publishes interactive entertainment software. The company offers videogames for various gaming and entertainment hardware platforms, including home videogame consoles, such as Microsoft Xbox 360, Nintendo Wii, and Sony PS3 and PS2; for handheld platforms, including Nintendo DS, Nintendo DSi, Sony PlayStation Portable, Sony PSPgo, and Apple iPhone; for game applications for the Next Generation NVIDIA Tegra mobile processor, which is used in Droid phones and tablets; and for personal computers. It serves various customers ranging from casual players to hardcore gaming enthusiasts. The company sells its products to retailers and distributors in North America and the United Kingdom, and primarily to distributors in the rest of Europe, Australia, and Asia. SouthPeak Interactive Corporation was founded in 1996 and is based in Midlothian, Virginia.