Disco (OTCMKTS:DSCSY) & SemiLEDS (NASDAQ:LEDS) Critical Contrast

SemiLEDS (NASDAQ:LEDS) and Disco (OTCMKTS:DSCSY) are both technology companies, but which is the superior business? We will compare the two businesses based on the strength of their analyst recommendations, risk, earnings, institutional ownership, valuation, dividends and profitability.

Volatility & Risk

SemiLEDS has a beta of 1.57, indicating that its share price is 57% more volatile than the S&P 500. Comparatively, Disco has a beta of 1.67, indicating that its share price is 67% more volatile than the S&P 500.

Institutional and Insider Ownership

76.3% of SemiLEDS shares are owned by institutional investors. Comparatively, 0.0% of Disco shares are owned by institutional investors. 58.5% of SemiLEDS shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Earnings and Valuation

This table compares SemiLEDS and Disco”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
SemiLEDS	$43.01 million	0.41	-$1.13 million	($0.13)	-16.58
Disco	$2.90 billion	11.18	$894.45 million	$0.94	31.81

Disco has higher revenue and earnings than SemiLEDS. SemiLEDS is trading at a lower price-to-earnings ratio than Disco, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares SemiLEDS and Disco’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
SemiLEDS	-3.92%	-43.09%	-6.39%
Disco	32.04%	27.68%	21.83%

Analyst Ratings

This is a summary of current ratings for SemiLEDS and Disco, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
SemiLEDS	1	0	0	0	1.00
Disco	0	1	1	0	2.50

Summary

Disco beats SemiLEDS on 11 of the 13 factors compared between the two stocks.

About SemiLEDS

SemiLEDs Corporation (NASDAQ: LEDS) develops, manufactures and sells light-emitting diode (LED) chips and related products. The company’s offerings are based on semiconductor technologies designed to convert electrical energy into light and have applications in general illumination, specialty lighting and other display or signaling uses. SemiLEDs has focused on high-brightness LED products, including chips that produce visible and ultraviolet light. Its operations have also included the development and manufacture of LED epitaxial wafers and chips, which are key components used by lighting and electronics manufacturers.

About Disco

DISCO Corporation develops and manufactures precision processing equipment and tools used in semiconductor and electronic-component production. Its products include grinding, dicing and polishing machines, along with the blades and other consumables used in those processes. The company’s technologies help manufacturers cut, thin and shape semiconductor wafers and other hard, brittle materials. DISCO serves customers in the global semiconductor industry and maintains operations and support for customers in markets around the world.