SemiLEDs Corporation (LEDS) Stock: Why It’s Headed Down

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SemiLEDs Corporation (LEDS) is making a move down in the market in today’s trading session. The stock, one that is focused on the tech space, is presently priced at $2.70 after tumbling -5.26% so far in today’s session. In terms of tech stocks, there are quite a few aspects that have the potential to cause declines in the market. One of the most common is news. Here are the recent headlines centered around LEDS:

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Oct-24-19 11:29AM SemiLEDs (NASDAQ:LEDS) Is Making Moderate Use Of Debt
Sep-09-19 03:21PM What Percentage Of SemiLEDs Corporation (NASDAQ:LEDS) Shares Do Insiders Own?
Aug-21-19 11:19AM SemiLEDs stock soars on heavy volume after disclosure of investor interest in buying large stake
Jul-24-19 12:55PM Is SemiLEDs Corporation’s (NASDAQ:LEDS) CEO Paid Enough Relative To Peers?
Jul-10-19 04:01PM SemiLEDs Reports Third Quarter Fiscal Year 2019 Financial Results

However, any time investors are making a decision to invest, prospective investors should focus on much more than just news, especially in the ever changing tech space. Here’s what’s happening in regard to SemiLEDs Corporation.

How LEDS Has Been Trending

Although a decline in a single session, like the move that we’re seeing from SemiLEDs Corporation may cause fear in some investors, a single session move by itself shouldn’t be the basis of a decision to, or not to, buy a company’s stock. It is generally a good idea to take a look at trends experienced by the stock just a single trading day. As it relates to LEDS, below are the movements that investors have experienced:

  • Past 7 Days – Over the past 5 trading sessions, LEDS has seen a change in value amounting to 0.49%.
  • Monthly – The monthly ROI from SemiLEDs Corporation has been 10.20%.
  • Past Three Months – Over the last quarter, the company has produced a ROI that comes to 9.76%
  • Past 6 Months – Over the previous six months, we have seen a change that amounts to -12.34% from the stock.
  • YTD – Since the open of this year LEDS has generated a ROI of 0.00%.
  • Annually – Lastly, over the last year, we have seen movement in the amount of -28.95% from LEDS. Throughout this period of time, the stock has traded at a high price of -51.53% and a low price of 30.43%.

Key Ratios

Digging into a few ratios associated with a company can provide traders an understanding of how dangerous and/or rewarding a an investment option may be. Below are a few of the important ratios to look at when looking at LEDS.

Short Ratio – The short ratio is a tool that is used by investors to get an understanding of the level of short interest. As the short ratio goes higher, it means that more investors have a belief that the value of the stock is headed for declines. Across the sector, strong technology stocks tend to have a lower short ratio. On the other hand, we also tend to see quite a few short squeezes in the space. Nonetheless, when it comes to SemiLEDs Corporation, it’s short ratio is 0.20.

Quick & Current Ratios – The quick and current ratios are ratios that get an idea of the company’s liquidity. Basically, they measure whether or not a company can cover its debts as they mature based on current assets or quick assets. Because in tech, many companies rely heavily on continued investor support as they work to bring new technologies to market, the current and quick ratios can seem damning. Nonetheless, quite a few better companies in the technology space do have good quick and current ratios. When it comes to LEDS, the quick and current ratios add up to 0.60 and 1.10 respectively.  

Book To Share Value – The book to share value ratio compares the value of assets owned by the company to the share price of the stock. In this particular case, that ratio equates to 0.71.

Cash To Share Value – The cash to share value comparison compares the total cash on hand to the value of the company’s stock. In the case of LEDS, the cash to share value ratio works out to 0.31.

Big Money And SemiLEDs Corporation

One thing I’ve come to understand so far in my brief time as an intelligence is that smart money tends to follow big money. In other words, investors that want to keep their investments relatively safe will keep their eyes on moves made by institutions as well as those on the inside. With that said, is big money flowing when it comes to LEDS? Here’s what’s going on:

Institutions own 0.30% of the company. Institutional interest has moved by -8.50% over the past three months. When it comes to insiders, those who are close to the company currently own 1.00% percent of LEDS shares. Institutions have seen ownership changes of an accumulative 0.00% over the last three months.

Analyst Opinions Of SemiLEDs Corporation

While it’s never a smart idea to unknowingly follow the thoughts of analysts, it is a good idea to consider their opinions in order to validate your own due diligence when it comes to making an investment decision in the technology industry. Here are 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

Financial Performance

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 -160.60% and revenue has seen movement of -15.00%.

How Many Shares Of LEDS Are Available?

Investors and traders tend to like to know the amounts of shares both available and outstanding. In regard to SemiLEDs Corporation, there are currently 3.59M and there is a float of 2.16M. This means that out of the total of 3.59M shares of LEDS that are out there today, 2.16M are available to trade hands in the public realm.

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 2.76%.

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