OSI Systems (NASDAQ:OSIS) and NeoMagic (OTCMKTS:NMGC) Financial Analysis

NeoMagic (OTCMKTS:NMGC) and OSI Systems (NASDAQ:OSIS) are both computer and technology companies, but which is the superior business? We will compare the two businesses based on the strength of their institutional ownership, dividends, valuation, risk, analyst recommendations, earnings and profitability.

Analyst Ratings

This is a summary of recent ratings for NeoMagic and OSI Systems, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
NeoMagic	0	0	0	0	N/A
OSI Systems	0	0	3	0	3.00

OSI Systems has a consensus target price of $172.67, suggesting a potential upside of 23.55%. Given OSI Systems’ higher possible upside, analysts plainly believe OSI Systems is more favorable than NeoMagic.

Valuation & Earnings

This table compares NeoMagic and OSI Systems’ revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
NeoMagic	N/A	N/A	N/A	N/A	N/A
OSI Systems	$1.54 billion	1.55	$128.15 million	$7.27	19.22

OSI Systems has higher revenue and earnings than NeoMagic.

Insider and Institutional Ownership

89.2% of OSI Systems shares are owned by institutional investors. 12.7% of NeoMagic shares are owned by company insiders. Comparatively, 5.6% of OSI Systems shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Risk and Volatility

NeoMagic has a beta of 0.36, meaning that its stock price is 64% less volatile than the S&P 500. Comparatively, OSI Systems has a beta of 1.08, meaning that its stock price is 8% more volatile than the S&P 500.

Profitability

This table compares NeoMagic and OSI Systems’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
NeoMagic	N/A	N/A	N/A
OSI Systems	8.33%	17.80%	7.97%

Summary

OSI Systems beats NeoMagic on 8 of the 9 factors compared between the two stocks.

About NeoMagic

NeoMagic Corporation designs and delivers semiconductors and software solutions for video, television, imaging, graphic, and audio devices. It offers microcontrollers; horizon digital picture frame and digital mobile TV solutions; and SOC processors, such as application processors and Neomobile TV solutions. The company, through its MercadoMagico.com division, operates an e-Commerce platform that allows user to buy and sell products from one another or buy premium electronic products. It sells its applications processors under the MiMagic brand name. The company was founded in 1993 and is based in Milpitas, California.

About OSI Systems

OSI Systems, Inc. designs and manufactures electronic systems and components. It operates in three segments: Security, Healthcare, and Optoelectronics and Manufacturing. The Security segment offers baggage and parcel inspection, cargo and vehicle inspection, hold baggage and people screening, radiation monitoring, explosive and narcotics trace detection systems, and optical inspection systems under the Rapiscan name. It also provides site design, installation, training, and technical support services; and turnkey security screening solutions under the S2 name. The Healthcare segment offers patient monitoring, cardiology and remote monitoring, and connected care systems and accessories under the Spacelabs name for use in critical care, emergency, and perioperative areas within hospitals, physicians' offices, medical clinics, and ambulatory surgery centers. The Optoelectronics and Manufacturing segment provides optoelectronic devices under the OSI Optoelectronics, OSI LaserDiode, OSI Laserscan, and Advanced Photonix names for the aerospace and defense, avionics, medical imaging and diagnostics, biochemistry analysis, pharmaceutical, nanotechnology, telecommunications, construction, and homeland security markets. It also offers electronics manufacturing services to original equipment manufacturers and end users for medical, automotive, defense, aerospace, industrial, and consumer applications under the OSI Electronics, APlus Products, Altaflex, and PFC Flexible Circuits names; LCD displays for medical, industrial, and consumer electronics applications; and flex circuits for OEM customers. This segment offers laser-based remote sensing devices to detect and classify vehicles in toll and traffic management systems under the OSI Laserscan and Autosense names; and solid-state laser products for aerospace, defense, telecommunication, and medical applications under the OSI LaserDiode name. The company was incorporated in 1987 and is headquartered in Hawthorne, California.