SemiLEDs Corporation (LEDS) Stock: Why It’s Headed For The Bottom

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SemiLEDs Corporation (LEDS) is making a move down in the market today. The company, one that is focused in the tech sector, is presently priced at $3.10 after tumbling -5.78% so far today. As it relates to technology stocks, there are quite a few aspects that have the ability to generate movement in the market. News tends to be one of the biggest reasons for the movement. Here are the most recent trending headlines associated with LEDS:

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Apr-10-19 04:01PM SemiLEDs Reports Second Quarter Fiscal Year 2019 Financial Results
Apr-08-19 04:01PM SemiLEDs to Announce Fiscal Second Quarter 2019 Financial Results on Wednesday, April 10, 2019
Mar-07-19 01:14PM What Type Of Shareholder Owns SemiLEDs Corporations (NASDAQ:LEDS)?
Jan-10-19 04:01PM SemiLEDs Reports First Quarter Fiscal Year 2019 Financial Results
Jan-07-19 04:01PM SemiLEDs to Announce Fiscal First Quarter 2019 Financial Results on Thursday, January 10, 2019

Nonetheless, any time investors are making an investing decision, investors should look at far more than news, especially in the ever evolving tech sector. Here’s what’s happing when it comes to SemiLEDs Corporation.

Recent Trends From LEDS

While a move toward the top in a single session, like the move that we’re seeing from SemiLEDs Corporation may lead to fear in some investors, a single session fall by itself should not be the reason for a decision to, or not to, invest in a company. It is always important to dig into trends experienced by the stock beyond a single trading session. When it comes to LEDS, below are the returns on investment that investors have seen:

  • Past 5 Trading Sessions – Over the last 7 days, LEDS has produced a change in price that amounts to -30.49%.
  • Past Month – The monthly performance from SemiLEDs Corporation works out to -17.99%.
  • Past Three Months – Over the past quarter, the stock has produced a ROI of 12.73%
  • Past 6 Months – Over the previous 6 months, investors have seen a change that equates to -23.65% from the company.
  • YTD – Since the close of last year LEDS has generated a return of 14.81%.
  • Full Year – Finally, in the last full year, investors have seen performance in the amount of -14.36% out of LEDS. In this period, the stock has sold at a high of -50.40% and a low of 26.02%.

Rations That You Should Think About

Looking at a few key ratios associated with a stock can give prospective traders a look of how risky and/or rewarding a pick may be. Below are some of the key ratios to look at when digging into LEDS.

Short Ratio – The short ratio is a measure of short interest. As the short ratio climbs, it means that more investors have a belief that the price of the stock is going to tumble. In general, strong technology stocks can have a lower short ratio. However, we tend to see a lot of short squeezes in the sector. Nonetheless, with regard to SemiLEDs Corporation, the stock’s short ratio clocks in at 1.04.

Quick & Current Ratios – The quick and current ratios are tools that are used to get an idea of the company’s liquidity. Essentially, they measure the company’s abilities to cover its debts as they mature using quick assets or current assets. Because in tech, many companies are reliant on continued investor support as they work to bring new technologies to market, the quick and current ratios can be damning. Nonetheless, several good picks in the tech sector come with strong current and quick ratios. In terms of LEDS, the quick and current ratios add up to 0.40 and 0.80 respectively.  

Book To Share Value – The book to share value compares the the price of shares to the book value of assets owned by the company. In this case, that ratio comes in at 1.18.

Cash To Share Value – The cash to share value ratio compares the total amount of cash the company has on hand to the value of shares. In this case, the cash to share value ratio is 0.79.

Big Money And SemiLEDs Corporation

Humans that are into investing seem to be infatuated with the term “Smart money follows big money.” It makes sense. Big money became big money by making smart decisions in the market. So, by following the moves of big money institutions and insiders, we can get a glimpse of what market pros think about a stock. When it comes to big money interest in LEDS, here’s what we’re seeing:

  • Institutions – As it stands now, institutional investors hold 2.00% of LEDS. Nonetheless, it’s important to consider that institutional ownership has seen a move in the amount of 0 over the past 3 months.
  • Investors On The Inside – with regard to insiders, members of the management team and others close to LEDS currently own 75.91% of the company. Insider ownership of the company has seen a change of 0.00% throughout the past quarter.

Analyst Opinions Of SemiLEDs Corporation

While it’s never a good idea to avoid doing your DD and blindly following the opinions of analysts, it is a good idea to use their analysis when validating your own thoughts when it comes to making investment decisions in the tech sector. Below you’ll find the recent moves that we’ve seen from analysts with regard to LEDS.

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Jul-08-11 Reiterated Canaccord Genuity Hold $11 → $6
Apr-13-11 Downgrade Canaccord Genuity Buy → Hold $11
Apr-06-11 Reiterated Barclays Capital Equal Weight $20 → $14
Jan-19-11 Initiated Canaccord Genuity Buy $23
Jan-18-11 Initiated Barclays Capital Equal Weight $20

Earnings

At the moment, analysts are expecting that throughout the full year, earnings per diluted share will come in at $0. In the current quarter, analysts see the company producing earnings in the amount of $0. Over the last 5 years, LEDS has generated revenue in the amount of $-16.00% with earnings coming in at 44.40%. On a quarter over quarter basis, earnings have seen movement of -148.40% and revenue has seen movement of -50.00%.

What You Need To Know About Share Counts

Investors seem to have a heavy interest in the total numbers of shares both outstanding and available. With respect to SemiLEDs Corporation, currently there are 3.31M with a float of 0.86M. These numbers mean that out of the total of 3.31M shares of LEDS in existence today, 0.86M are able to be traded by the public.

Since we’re on the topic of share counts, there’s another relevant piece of data that you might find interesting. That would be the short percentage of the float. Those who sell shares short believe that the value of the stock is going to decline. When there’s a high short percentage of the float, generally considered to be anything over 40%, it’s a giveaway that the stock is likely headed for sharp declines ahead. Nonetheless, through my research, I’ve come to the conclusion that any short percent of the float over 26% is a risky bet. When it comes to LEDS, the short percent of the float is 20.64%.

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