Institutional investors control 69% of Alpha and Omega Semiconductor Limited (NASDAQ:AOSL) and were rewarded last week after stock increased 7.4%

Key Insights

• Institutions' substantial holdings in Alpha and Omega Semiconductor implies that they have significant influence over the company's share price
• 51% of the business is held by the top 6 shareholders
• Insiders own 17% of Alpha and Omega Semiconductor

If you want to know who really controls Alpha and Omega Semiconductor Limited (NASDAQ:AOSL), then you'll have to look at the makeup of its share registry. We can see that institutions own the lion's share in the company with 69% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

And last week, institutional investors ended up benefitting the most after the company hit US$1.2b in market cap. The one-year return on investment is currently 91% and last week's gain would have been more than welcomed.

Let's take a closer look to see what the different types of shareholders can tell us about Alpha and Omega Semiconductor.

See our latest analysis for Alpha and Omega Semiconductor

What Does The Institutional Ownership Tell Us About Alpha and Omega Semiconductor?

Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to companies that are included in major indices.

As you can see, institutional investors have a fair amount of stake in Alpha and Omega Semiconductor. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of Alpha and Omega Semiconductor, (below). Of course, keep in mind that there are other factors to consider, too.

Since institutional investors own more than half the issued stock, the board will likely have to pay attention to their preferences. We note that hedge funds don't have a meaningful investment in Alpha and Omega Semiconductor. Because actions speak louder than words, we consider it a good sign when insiders own a significant stake in a company. In Alpha and Omega Semiconductor's case, its Top Key Executive, Mike Fushing Chang, is the largest shareholder, holding 14% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 13% and 8.3%, of the shares outstanding, respectively. Additionally, the company's CEO Stephen Chang directly holds 1.0% of the total shares outstanding.

On further inspection, we found that more than half the company's shares are owned by the top 6 shareholders, suggesting that the interests of the larger shareholders are balanced out to an extent by the smaller ones.

While studying institutional ownership for a company can add value to your research, it is also a good practice to research analyst recommendations to get a deeper understand of a stock's expected performance. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

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 company management answer to the board and the latter should represent the interests of shareholders. Notably, sometimes top-level managers are on the board themselves.

Insider ownership is positive when it signals leadership are thinking like the true owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative in some circumstances.

It seems insiders own a significant proportion of Alpha and Omega Semiconductor Limited. Insiders own US$204m worth of shares in the US$1.2b company. That's quite meaningful. Most would say this shows a good degree of alignment with shareholders, especially in a company of this size. You can click here to see if those insiders have been buying or selling.

General Public Ownership

With a 14% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Alpha and Omega Semiconductor. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Alpha and Omega Semiconductor better, we need to consider many other factors. Consider risks, for instance. Every company has them, and we've spotted 2 warning signs for Alpha and Omega Semiconductor you should know about.

But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter future.

NB: Figures in this article are calculated using data from the last twelve months, which refer to the 12-month period ending on the last date of the month the financial statement is dated. This may not be consistent with full year annual report figures.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an 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 account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.