Financial Comparison: Disco (OTCMKTS:DSCSY) versus SemiLEDS (NASDAQ:LEDS)

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

Volatility and Risk

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

Institutional and Insider Ownership

0.0% of Disco shares are owned by institutional investors. Comparatively, 76.3% of SemiLEDS shares are owned by institutional investors. 58.5% of SemiLEDS shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Analyst Ratings

This is a breakdown of current recommendations for Disco and SemiLEDS, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Disco	0	0	1	1	3.50
SemiLEDS	1	0	0	0	1.00

Valuation & Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Disco	$2.90 billion	9.80	$894.45 million	$0.94	27.89
SemiLEDS	$43.01 million	0.45	-$1.13 million	($0.13)	-18.15

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

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

Summary

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

About Disco

Disco Corporation manufactures and sells precision cutting, grinding, and polishing machines in Japan and internationally. Its precision machines include dicing saws, laser saws, grinders, polishers, wafer mounters, die separators, surface planers, and waterjet saws. The company also offers precision processing tools, such as dicing blades, grinding wheels, and dry polishing wheels; and other products, such as accessory equipment. In addition, it is involved in the disassembly and recycling of precision cutting, grinding, and polishing machines, as well as provides training services for the maintenance and operation of its products. Further, the company leases precision machines; and purchases and sells used machines. Additionally, it manufactures precision diamond abrasive tools, as well as offers chargeable processing services. The company was founded in 1937 and is headquartered in Tokyo, Japan.

About SemiLEDS

SemiLEDs Corporation develops, manufactures, and sells light emitting diode (LED) chips, LED components, and LED modules and systems in the United States, Taiwan, the Netherlands, Germany, Japan, and internationally. The company also sells enhanced vertical, LED product series in blue, white, green, and UV; LED chips to packagers or distributors; and lighting products primarily to original design manufacturers of lighting products and the end-users of lighting devices, as well as packs and sells its LED chips. Its products are used for general lighting applications, including commercial, industrial, and residential lighting; and specialty industrial applications, such as ultraviolet or UV, curing of polymers, LED light therapy in medical/cosmetic applications, counterfeit detection, germicidal and viricidal devices LED lighting for horticulture applications, architectural lighting, and entertainment lighting. The company was incorporated in 2005 and is based in Chu-Nan, Taiwan.