SemiLEDs (LEDS) Highlighted As Weak On High Volume

Trade-Ideas LLC identified SemiLEDs ( LEDS) as a weak on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified SemiLEDs as such a stock due to the following factors:

  • LEDS has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $18.9 million.
  • LEDS has traded 294,710 shares today.
  • LEDS is trading at 6.77 times the normal volume for the stock at this time of day.
  • LEDS is trading at a new low 5.02% below yesterday's close.

'Weak on High Relative Volume' stocks are worth watching because major volume moves tend to indicate underlying activity such as material stock news, analyst downgrades, insider selling, selling from 'superinvestors,' or that hedge funds and traders are piling out of a stock ahead of a catalyst. Regardless of the impetus behind the price and volume action, when a stock moves with strength and volume it can indicate the start of a new trend on which early investors can capitalize (or avoid losses by trimming weak positions). In the event of a well-timed trading opportunity, combining technical indicators with fundamental trends and a disciplined trading methodology should help you take the first steps towards investment success.

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More details on LEDS:

SemiLEDs Corporation develops, manufactures, and sells light emitting diode (LED) chips and LED components.

The average volume for SemiLEDs has been 467,700 shares per day over the past 30 days. SemiLEDs has a market cap of $19.8 million and is part of the technology sector and electronics industry. The stock has a beta of 0.66 and a short float of 2% with 0.01 days to cover. Shares are up 82.4% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates SemiLEDs as a sell. Among the areas we feel are negative, one of the most important has been an overall disappointing return on equity.

Highlights from the ratings report include:
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Semiconductors & Semiconductor Equipment industry and the overall market, SEMILEDS CORP's return on equity significantly trails that of both the industry average and the S&P 500.
  • The change in net income from the same quarter one year ago has significantly exceeded that of the Semiconductors & Semiconductor Equipment industry average, but is less than that of the S&P 500. The net income has decreased by 7.0% when compared to the same quarter one year ago, dropping from -$3.04 million to -$3.25 million.
  • The revenue fell significantly faster than the industry average of 5.9%. Since the same quarter one year prior, revenues fell by 32.2%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
  • SEMILEDS CORP reported flat earnings per share in the most recent quarter. This company has not demonstrated a clear trend in earnings over the past 2 years, making it difficult to accurately predict earnings for the coming year. During the past fiscal year, SEMILEDS CORP continued to lose money by earning -$4.60 versus -$8.80 in the prior year.
  • Looking at where the stock is today compared to one year ago, we find that it is higher, and it has outperformed the rise in the S&P 500 over the same period, despite the company's weak earnings results. Turning our attention to the future direction of the stock, we do not believe this stock offers ample reward opportunity to compensate for the risks, despite the fact that it rose over the past year.

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