LEDS Stock Soars 410% YTD: Buy & Hold Or Sell?

Stocks of chip manufacturer SemiLEDs Corporation (LEDS:US, NASDAQ:LEDS) gained as much as five per cent in the pre-market hours on Friday, June 11, after witnessing a nine per cent decline in the previous trading session.

The company’s revenue was US$ 1.2 million in the second quarter of fiscal 2021, up against US$ 719,000 in the previous quarter. The company reported a net loss of US$ 255,00 in Q2 FY21, improving against a loss of US$ 697,000 in Q1 FY21.

SemiLEDs held a total cash balance and cash equivalent of US$2.1 million as of February 28, 2021, which is down by US$ 0.6 million against US$ 2.7 million in Q1 FY21. The company’s cash reserve dropped in Q2 FY21 as its production operations were closed for two weeks on the occasion of the Chinese New Year holidays.

Let us look at this semiconductor’s price-performance:

SemiLEDs Corporation (LEDS:US, NASDAQ:LEDS)

 

The Taiwan-based semiconductor produces ultra-high brightness LED chips for commercial and residential lighting systems. The LED firm generates its maximum revenue from the US.

The semiconductor stock has rocketed over 410 per cent year-to-date (YTD). The company has been trending on the NASDAQ exchange as one of the top pre-market movers for the last one month.

The stock has swelled more than 300 per cent quarter-to-date (QTD). However, it is down by 42 per cent to US$ 18.26 apiece against its lifetime high of 31.44 apiece (Recorded on June 7, 2021).

In the last twelve months, it is up almost 471 per cent. It’s market cap is around US$ 74 million and holds a price-to-cashflow ratio of nearly 59.

SemiLEDs Corp’s One-Year Price Performance Against Moving Average Multiple and Volume. (Source: Refinitiv)

The 30-day average trading volume has touched 16 million shares, compared to its 50-day average volume of 9.7 million shares. The micro-cap stock’s price trajectory has gone through a correction after hitting a record high on Monday but still up against the moving average multiple.

At the previous closing price, its share was moving 284 per cent above its 200-day simple moving average, indicating a long-term uptrend.

The stock could bounce back from Wednesday’s sharp dip as the stock has witnessed a pre-market surge. As per Refinitiv data, its last 30-day implied volatility has zoomed to over 312 points. Hence, it might be a risky bet due to its highly volatile price movement. 

Please note: The above constitutes a preliminary view and any interest in stocks should be evaluated further from an investment point of view. The reference data in this article has been partly sourced from Refinitiv.

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