Allegro MicroSystems (NASDAQ:ALGM) and Amkor Technology (NASDAQ:AMKR) Critical Survey

Amkor Technology (NASDAQ:AMKR) and Allegro MicroSystems (NASDAQ:ALGM) are both computer and technology companies, but which is the better investment? We will contrast the two businesses based on the strength of their risk, earnings, analyst recommendations, dividends, profitability, institutional ownership and valuation.

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for Amkor Technology and Allegro MicroSystems, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Amkor Technology	0	7	4	0	2.36
Allegro MicroSystems	1	2	9	0	2.67

Amkor Technology currently has a consensus target price of $69.88, indicating a potential upside of 4.71%. Allegro MicroSystems has a consensus target price of $55.20, indicating a potential upside of 11.85%. Given Allegro MicroSystems’ stronger consensus rating and higher possible upside, analysts plainly believe Allegro MicroSystems is more favorable than Amkor Technology.

Profitability

This table compares Amkor Technology and Allegro MicroSystems’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Amkor Technology	6.17%	9.88%	5.40%
Allegro MicroSystems	-1.67%	6.09%	4.11%

Valuation & Earnings

This table compares Amkor Technology and Allegro MicroSystems”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Amkor Technology	$6.71 billion	2.47	$373.89 million	$1.75	38.13
Allegro MicroSystems	$890.10 million	10.33	-$14.90 million	($0.09)	-548.33

Amkor Technology has higher revenue and earnings than Allegro MicroSystems. Allegro MicroSystems is trading at a lower price-to-earnings ratio than Amkor Technology, indicating that it is currently the more affordable of the two stocks.

Insider & Institutional Ownership

42.8% of Amkor Technology shares are owned by institutional investors. Comparatively, 56.5% of Allegro MicroSystems shares are owned by institutional investors. 26.4% of Amkor Technology shares are owned by company insiders. Comparatively, 0.5% of Allegro MicroSystems shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Volatility and Risk

Amkor Technology has a beta of 2.2, indicating that its stock price is 120% more volatile than the S&P 500. Comparatively, Allegro MicroSystems has a beta of 1.9, indicating that its stock price is 90% more volatile than the S&P 500.

Summary

Amkor Technology beats Allegro MicroSystems on 9 of the 14 factors compared between the two stocks.

About Amkor Technology

Amkor Technology, Inc. provides outsourced semiconductor packaging and test services in the United States, Japan, Europe, the Middle East, Africa, and the Asia Pacific. It offers turnkey packaging and test services, including semiconductor wafer bump, wafer probe, wafer back-grind, package design, packaging, system-level and final test, and drop shipment services; flip chip scale package products for smartphones, tablets, and other mobile consumer electronic devices; flip chip stacked chip scale packages that are used to stack memory digital baseband, and as applications processors in mobile devices; flip-chip ball grid array packages for various networking, storage, computing, automotive, and consumer applications; and memory products for system memory or platform data storage. The company also provides wafer-level CSP packages for power management, transceivers, sensors, wireless charging, codecs, radar, and specialty silicon; wafer-level fan-out packages used in power management, transceivers, radar, and specialty silicon; silicon wafer integrated fan-out technology that replaces a laminate substrate with a thinner structure; leadframe packages for electronic devices and mixed-signal applications; and substrate-based wirebond packages used to connect a die to a substrate. In addition, it offers micro-electro-mechanical systems packages that are miniaturized mechanical and electromechanical devices; and advanced system-in-package modules used in radio frequency and front end modules, basebands, connectivity, fingerprint sensors, display and touch screen drivers, sensors and MEMS, and NAND memory and solid-state drives. Further, the company provides wafer, package, and system level test services, as well as burn-in test and test development services. It serves integrated device manufacturers, fabless semiconductor companies, original equipment manufacturers, and contract foundries. The company was founded in 1968 and is headquartered in Tempe, Arizona.

About Allegro MicroSystems

Allegro MicroSystems, Inc., together with its subsidiaries, designs, develops, manufactures, and markets sensor integrated circuits (ICs) and application-specific analog power ICs for motion control and energy-efficient systems. Its products include magnetic sensor ICs, such as position, speed, and current sensor ICs; and power ICs comprising motor driver ICs, regulator and LED driver ICs, and isolated gate drivers. The company sells its products to original equipment manufacturers and distributors primarily in the automotive and industrial markets through its direct sales force, third party distributors, independent sales representatives, and consignment. It operates in the United States, rest of the Americas, Europe, Japan, Greater China, South Korea, and other Asian markets. The company was founded in 1990 and is headquartered in Manchester, New Hampshire. Allegro MicroSystems, Inc. is a subsidiary of Sanken Electric Co., Ltd.