Contrasting Alpha and Omega Semiconductor (NASDAQ:AOSL) & Silicon Motion Technology (NASDAQ:SIMO)

Alpha and Omega Semiconductor (NASDAQ:AOSL) and Silicon Motion Technology (NASDAQ:SIMO) are both small-cap computer and technology companies, but which is the superior investment? We will contrast the two businesses based on the strength of their earnings, institutional ownership, profitability, valuation, risk, dividends and analyst recommendations.

Insider & Institutional Ownership

79.0% of Alpha and Omega Semiconductor shares are owned by institutional investors. Comparatively, 78.0% of Silicon Motion Technology shares are owned by institutional investors. 16.9% of Alpha and Omega Semiconductor shares are owned by company insiders. Comparatively, 5.3% of Silicon Motion Technology shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Alpha and Omega Semiconductor	-3.46%	-0.23%	-0.18%
Silicon Motion Technology	11.29%	11.59%	8.77%

Earnings and Valuation

This table compares Alpha and Omega Semiconductor and Silicon Motion Technology”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Alpha and Omega Semiconductor	$666.40 million	1.74	-$11.08 million	($0.80)	-49.81
Silicon Motion Technology	$803.55 million	2.21	$52.87 million	$2.69	19.63

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

Analyst Recommendations

This is a summary of current recommendations for Alpha and Omega Semiconductor and Silicon Motion Technology, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Alpha and Omega Semiconductor	1	0	2	0	2.33
Silicon Motion Technology	1	0	7	0	2.75

Alpha and Omega Semiconductor presently has a consensus price target of $38.67, indicating a potential downside of 2.97%. Silicon Motion Technology has a consensus price target of $80.63, indicating a potential upside of 52.70%. Given Silicon Motion Technology’s stronger consensus rating and higher probable upside, analysts clearly believe Silicon Motion Technology is more favorable than Alpha and Omega Semiconductor.

Risk and Volatility

Alpha and Omega Semiconductor has a beta of 2.47, indicating that its share price is 147% more volatile than the S&P 500. Comparatively, Silicon Motion Technology has a beta of 0.79, indicating that its share price is 21% less volatile than the S&P 500.

Summary

Silicon Motion Technology beats Alpha and Omega Semiconductor on 11 of the 14 factors compared between the two stocks.

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.

About Silicon Motion Technology

Silicon Motion Technology Corporation, together with its subsidiaries, designs, develops, and markets NAND flash controllers for solid-state storage devices. The company offers controllers for computing-grade solid state drives (SSDs), which are used in PCs and other client devices; enterprise-grade SSDs used in data centers; eMMC and UFS mobile embedded storage for use in smartphones and IoT devices; flash memory cards and flash drives for use in expandable storage; and specialized SSDs that are used in industrial, commercial, and automotive applications. It markets its controllers under the SMI brand; enterprise-grade SSDs under the Shannon Systems brand; and single-chip industrial-grade SSDs under the FerriSSD, Ferri-eMMC, and Ferri-UFS brands. The company markets and sells its products through direct sales personnel and independent electronics distributors to NAND flash makers, module makers, hyperscalers, and OEMs. It operates in Taiwan, the United States, Korea, China, Malaysia, Singapore, and internationally. The company was founded in 1995 and is based in Hong Kong, Hong Kong.