Analyzing GlobalFoundries (NASDAQ:GFS) and Alpha and Omega Semiconductor (NASDAQ:AOSL)

GlobalFoundries (NASDAQ:GFS) and Alpha and Omega Semiconductor (NASDAQ:AOSL) are both computer and technology companies, but which is the better business? We will compare the two companies based on the strength of their institutional ownership, profitability, risk, earnings, analyst recommendations, dividends and valuation.

Institutional and Insider Ownership

79.0% of Alpha and Omega Semiconductor shares are held by institutional investors. 16.7% of Alpha and Omega Semiconductor shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Analyst Recommendations

This is a summary of current ratings and recommmendations for GlobalFoundries and Alpha and Omega Semiconductor, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
GlobalFoundries	2	9	7	0	2.28
Alpha and Omega Semiconductor	1	1	2	0	2.25

GlobalFoundries currently has a consensus target price of $43.00, suggesting a potential upside of 20.58%. Alpha and Omega Semiconductor has a consensus target price of $32.00, suggesting a potential upside of 12.68%. Given GlobalFoundries’ stronger consensus rating and higher possible upside, research analysts plainly believe GlobalFoundries is more favorable than Alpha and Omega Semiconductor.

Earnings & Valuation

This table compares GlobalFoundries and Alpha and Omega Semiconductor”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
GlobalFoundries	$6.75 billion	2.92	-$265.00 million	($0.21)	-169.81
Alpha and Omega Semiconductor	$696.16 million	1.23	-$96.98 million	($3.27)	-8.69

Alpha and Omega Semiconductor has lower revenue, but higher earnings than GlobalFoundries. GlobalFoundries is trading at a lower price-to-earnings ratio than Alpha and Omega Semiconductor, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares GlobalFoundries and Alpha and Omega Semiconductor’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
GlobalFoundries	-1.68%	6.55%	4.32%
Alpha and Omega Semiconductor	-13.93%	-0.83%	-0.66%

Volatility & Risk

GlobalFoundries has a beta of 1.49, suggesting that its stock price is 49% more volatile than the S&P 500. Comparatively, Alpha and Omega Semiconductor has a beta of 2.1, suggesting that its stock price is 110% more volatile than the S&P 500.

Summary

GlobalFoundries beats Alpha and Omega Semiconductor on 9 of the 14 factors compared between the two stocks.

About GlobalFoundries

GlobalFoundries Inc., a semiconductor foundry, provides range of mainstream wafer fabrication services and technologies worldwide. It manufactures various semiconductor devices, including microprocessors, mobile application processors, baseband processors, network processors, radio frequency modems, microcontrollers, and power management units. GlobalFoundries Inc. has a strategic partnership with Efficient Computer to develop high-performance computer processors. The company was incorporated in 2008 and is headquartered in Malta, New York.

About Alpha and Omega Semiconductor

Alpha and Omega Semiconductor Limited designs, develops, and supplies power semiconductor products for computing, consumer electronics, communication, and industrial applications in Hong Kong, China, South Korea, the United States, and internationally. It offers power discrete products, including metal-oxide-semiconductor field-effect transistors (MOSFET), SRFETs, XSFET, electrostatic discharge, protected MOSFETs, high and mid-voltage MOSFETs, and insulated gate bipolar transistors for use in smart phone chargers, battery packs, notebooks, desktop and servers, data centers, base stations, graphics card, game boxes, TVs, AC adapters, power supplies, motor control, power tools, E-vehicles, white goods and industrial motor drives, UPS systems, solar inverters, and industrial welding. The company also provides power ICs that deliver power, as well as control and regulate the power management variables, such as the flow of current and level of voltage. Its power ICs are used in flat panel displays, TVs, notebooks, graphic cards, servers, DVD/Blu-Ray players, set-top boxes, and networking equipment. In addition, the company offers transient voltage suppressors, analog switch, and electromagnetic interference filter for notebooks, desktop PCs, tablets, flat panel displays, TVs, smart phones, and portable electronic devices; and 650V and 1200V SiC MOSFET. Alpha and Omega Semiconductor Limited was incorporated in 2000 and is headquartered in Sunnyvale, California.