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The large shareholder groups of Alpha and Omega Semiconductor Limited (NASDAQ: AOSL) have power over the company. Institutions often own shares in more established companies, while it is not uncommon to see insiders owning a good number of smaller companies. Warren Buffett said he enjoys “a business with sustainable competitive advantages that is led by skilled, owner-oriented people.” So it’s nice to see some insider ownership as it can suggest that the management is owner-driven.
Alpha and Omega Semiconductor isn’t huge, but it’s not particularly small either. He has a market cap of US $ 1.4 billion, which means he generally expects to see certain institutions listed on the stock register. Looking at our data on ownership groups (below), it appears that institutions own shares in the company. Let’s dig deeper into each type of owner, to learn more about Alpha and Omega Semiconductor.
NasdaqGS: Distribution of the ownership of the AOSL on January 8, 2022
What does institutional ownership tell us about Alpha and Omega Semiconductor?
Many institutions measure their performance against an index that approximates the local market. Thus, they generally pay more attention to companies that are included in the major indices.
We can see that Alpha and Omega Semiconductor have institutional investors; and they own a good portion of the company’s stock. This may indicate that the company has a certain degree of credibility in the investment community. However, it is better not to rely on the so-called validation that accompanies institutional investors. They too are sometimes wrong. It is not uncommon to see a sharp drop in the stock price if two large institutional investors attempt to sell a stock at the same time. So it’s worth checking out the past earnings trajectory of Alpha and Omega Semiconductor (below). Of course, keep in mind that there are other factors to consider as well.
Investors should note that institutions actually own more than half of the business, so they can collectively wield significant power. We note that the hedge funds do not have a significant investment in Alpha and Omega Semiconductor. Company CEO Mike Fushing Chang is the largest shareholder with 15% of the shares outstanding. For context, the second largest shareholder owns around 7.3% of the outstanding shares, followed by 5.5% ownership by the third largest shareholder.
A closer look at our ownership figures suggests that the top 12 shareholders have a combined 51% ownership, implying that no shareholder has a majority.
While studying the institutional ownership of a company can add value to your research, it is also recommended that you research analyst recommendations to better understand the expected performance of a stock. There are a reasonable number of analysts covering the stock, so it can be helpful to know their overall vision for the future.
Insider Ownership of Alpha and Omega Semiconductor
While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. The management ultimately reports to the board of directors. However, it is not uncommon for managers to be board members, especially if they are founders or CEOs.
I generally consider insider ownership to be a good thing. However, there are times when it is more difficult for other shareholders to hold the board accountable for decisions.
Our information suggests that insiders retain a significant stake in Alpha and Omega Semiconductor Limited. Insiders hold $ 276 million in company shares worth $ 1.4 billion. It is quite significant. Most would say it shows a good degree of alignment with shareholders, especially in a company of this size. You can click here to see if these insiders have bought or sold.
General public property
The general public, who are generally individual investors, own a 23% stake in Alpha and Omega Semiconductor. While this group cannot necessarily take the lead, it can certainly have a real influence on how the business is run.
Next steps:
It’s always worth thinking about the different groups that own shares in a company. But to better understand Alpha and Omega Semiconductor, there are many other factors that we need to consider. Take risks for example – Alpha and Omega Semiconductor have 2 warning signs we think you should be aware.
If you’d rather find out what analysts are predicting in terms of future growth, don’t miss this free analyst forecast report.
NB: The figures in this article are calculated from data for the last twelve months, which refer to the 12-month period ending on the last date of the month of date of the financial statement. This may not be consistent with the figures in the annual report for the entire year.
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This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts using only unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock and does not take into account your goals or your financial situation. Our aim is to bring you long-term, targeted analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price sensitive companies or qualitative documents. Simply Wall St has no position in any of the stocks mentioned.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
