Critical Contrast: Alpha and Omega Semiconductor (NASDAQ:AOSL) and Canadian Solar (NASDAQ:CSIQ)

Alpha and Omega Semiconductor (NASDAQ:AOSL) and Canadian Solar (NASDAQ:CSIQ) 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 risk, analyst recommendations, profitability, institutional ownership, valuation, earnings and dividends.

Insider & Institutional Ownership

79.0% of Alpha and Omega Semiconductor shares are held by institutional investors. Comparatively, 52.4% of Canadian Solar shares are held by institutional investors. 17.9% of Alpha and Omega Semiconductor shares are held by insiders. Comparatively, 21.5% of Canadian Solar shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Volatility & Risk

Alpha and Omega Semiconductor has a beta of 2.42, meaning that its share price is 142% more volatile than the S&P 500. Comparatively, Canadian Solar has a beta of 1.29, meaning that its share price is 29% more volatile than the S&P 500.

Earnings & Valuation

This table compares Alpha and Omega Semiconductor and Canadian Solar”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	$657.27 million	1.52	-$11.08 million	($0.34)	-102.38
Canadian Solar	$6.51 billion	0.14	$274.19 million	$2.88	4.88

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

Analyst Recommendations

This is a breakdown of recent ratings and price targets for Alpha and Omega Semiconductor and Canadian Solar, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Alpha and Omega Semiconductor	1	0	2	0	2.33
Canadian Solar	2	4	4	0	2.20

Alpha and Omega Semiconductor presently has a consensus target price of $42.67, indicating a potential upside of 22.57%. Canadian Solar has a consensus target price of $23.33, indicating a potential upside of 66.04%. Given Canadian Solar’s higher possible upside, analysts clearly believe Canadian Solar is more favorable than Alpha and Omega Semiconductor.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Alpha and Omega Semiconductor	-1.69%	-0.33%	-0.25%
Canadian Solar	0.56%	0.99%	0.31%

Summary

Canadian Solar beats Alpha and Omega Semiconductor on 10 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 Canadian Solar

Canadian Solar Inc., together with its subsidiaries, provides solar energy and battery energy storage products and solutions in in Asia, the Americas, Europe, and internationally. The company operates through two segments, CSI Solar and Recurrent Energy. The CSI Solar segment designs, develops, and manufactures solar ingots, wafers, cells, modules, and other solar power and battery storage products. It offers standard solar modules and battery storage solutions; solar system kits, such as inverters, racking systems, and other accessories; power electronic products; and engineering, procurement, and construction (EPC) services, as well as operates battery energy storage projects. The Recurrent Energy segment engages in the development, construction, maintenance, and sale of solar power and battery storage projects; and operation of solar power plants; and sale of electricity. This segment provides operation and maintenance (O&M) services, including monitoring, inspections, repair, and replacement of plant equipment; and site management and administrative support services for solar projects, as well as asset management services. It has a fleet of solar and battery energy storage plants in operation with an aggregate capacity of approximately 1,005 MWp and 600 MWh. It serves distributors, system integrators, project developers, and installers/EPC companies, as well as utility companies or grid operators, public utilities, licensed suppliers, corporate offtakers, and commercial, industrial or government end users. It sells its products primarily under its Canadian Solar brand name. Canadian Solar Inc. was incorporated in 2001 and is based in Guelph, Canada.