Analyzing Cree (CREE) & Fairchild Semiconductor Intl (FCS)

Fairchild Semiconductor Intl (NASDAQ: FCS) and Cree (NASDAQ:CREE) are both technology companies, but which is the better stock? We will contrast the two businesses based on the strength of their analyst recommendations, dividends, risk, valuation, earnings, profitability and institutional ownership.

Valuation and Earnings

This table compares Fairchild Semiconductor Intl and Cree’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Fairchild Semiconductor Intl N/A N/A N/A $0.06 331.06
Cree $1.50 billion 1.48 $111.05 million ($1.06) -21.56

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

Profitability

This table compares Fairchild Semiconductor Intl and Cree’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Fairchild Semiconductor Intl 1.97% 2.46% 1.77%
Cree -7.36% 0.33% 0.28%

Volatility and Risk

Fairchild Semiconductor Intl has a beta of 1.72, meaning that its share price is 72% more volatile than the S&P 500. Comparatively, Cree has a beta of 1.01, meaning that its share price is 1% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current ratings for Fairchild Semiconductor Intl and Cree, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Fairchild Semiconductor Intl 0 0 0 0 N/A
Cree 1 8 2 0 2.09

Cree has a consensus target price of $24.71, indicating a potential upside of 8.16%. Given Cree’s higher possible upside, analysts plainly believe Cree is more favorable than Fairchild Semiconductor Intl.

Insider and Institutional Ownership

89.7% of Fairchild Semiconductor Intl shares are held by institutional investors. Comparatively, 86.5% of Cree shares are held by institutional investors. 0.7% of Fairchild Semiconductor Intl shares are held by insiders. Comparatively, 1.3% of Cree shares are held by 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.

Summary

Fairchild Semiconductor Intl beats Cree on 6 of the 10 factors compared between the two stocks.

Fairchild Semiconductor Intl Company Profile

Fairchild Semiconductor International, Inc. is focused on developing, manufacturing and selling power management solutions. The Company is engaged in power analog and discrete design, as well as packaging. It also makes non-power semiconductor and micro-electro-mechanical systems (MEMS)-based solutions. The Company’s products are used in various end market applications, including industrial, home appliance, automotive, mobile, server and cloud computing, lighting and consumer electronics. It develops a range of power and signal path products for industrial, appliance, cloud computing and automotive applications. The Company’s segments include Switching Power Solutions segment (SPS), the Analog Power and Signal Solutions segment (APSS), and Standard Products Group (SPG). It also invests in wafer fabrication and packaging technology to support the development of these products. The Company also has an eight-inch wafer fabrication site in Bucheon, Korea.

Cree Company Profile

Cree, Inc. is a manufacturer of lighting-class light emitting diode (LED) products, lighting products and semiconductor products for power and radio-frequency (RF) applications. The Company’s products are focused for applications, such as indoor and outdoor lighting, video displays, transportation, electronic signs and signals, power supplies, inverters and wireless systems. The Company has three segments: Lighting Products, LED Products, and Power and RF Products. The Company’s Lighting Products segment offers LED lighting systems and bulbs. The Company’s LED Products segment offers LED components, LED chips and silicon carbide (SiC) materials. The Company’s Power and RF Products segment offers power devices and RF devices. The Company designs, manufactures and markets lighting systems for indoor and outdoor applications, with a focus on LED lighting systems for the commercial, industrial and consumer markets.

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