Analyzing SemiLEDS (NASDAQ:LEDS) and Amtech Systems (NASDAQ:ASYS)

SemiLEDS (NASDAQ:LEDS) and Amtech Systems (NASDAQ:ASYS) are both small-cap technology companies, but which is the superior business? We will contrast the two businesses based on the strength of their institutional ownership, analyst recommendations, valuation, dividends, risk, profitability and earnings.

Valuation and Earnings

This table compares SemiLEDS and Amtech Systems”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
SemiLEDS	$43.01 million	0.39	-$1.13 million	($0.13)	-15.45
Amtech Systems	$79.36 million	2.74	-$30.33 million	$0.26	47.77

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

Volatility and Risk

SemiLEDS has a beta of 1.49, indicating that its share price is 49% more volatile than the S&P 500. Comparatively, Amtech Systems has a beta of 2.09, indicating that its share price is 109% more volatile than the S&P 500.

Analyst Ratings

This is a summary of current ratings and price targets for SemiLEDS and Amtech Systems, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
SemiLEDS	1	0	0	0	1.00
Amtech Systems	0	3	2	0	2.40

Amtech Systems has a consensus price target of $22.00, indicating a potential upside of 77.13%. Given Amtech Systems’ stronger consensus rating and higher probable upside, analysts clearly believe Amtech Systems is more favorable than SemiLEDS.

Profitability

This table compares SemiLEDS and Amtech Systems’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
SemiLEDS	-3.92%	-43.09%	-6.39%
Amtech Systems	4.90%	6.33%	4.00%

Insider and Institutional Ownership

76.3% of SemiLEDS shares are held by institutional investors. Comparatively, 50.2% of Amtech Systems shares are held by institutional investors. 58.5% of SemiLEDS shares are held by company insiders. Comparatively, 26.9% of Amtech Systems shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Summary

Amtech Systems beats SemiLEDS on 11 of the 14 factors compared between the two stocks.

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.

About Amtech Systems

Amtech Systems, Inc. manufactures and sells capital equipment and related consumables for use in fabricating silicon carbide (SiC), silicon power devices, analog and discrete devices, electronic assemblies, and light-emitting diodes (LEDs) worldwide. The company operates through Semiconductor and Material and Substrate segments. The Semiconductor segment designs, manufactures, sells, and services thermal processing equipment, including solder reflow ovens, horizontal diffusion furnaces, and custom high-temp belt furnaces for use by semiconductor, electronics, and electro/mechanical assembly manufacturers; and diffusion and reflow thermal systems, as well as wafer cleaning equipment and related services. The Material and Substrate segment manufactures and sells consumables and machinery for lapping and polishing of materials, such as silicon wafers for semiconductor products; sapphire substrates for LED lighting and mobile devices; silicon carbide wafers for LED and power device applications; various glass and silica components for 3D image transmission; quartz and ceramic components for telecommunications devices; and medical device components, and optical and photonics applications. It also offers substrate products comprising of double-sided wafer cleaning system, entegrity head tester, substrate carrier, substrate polishing templates, double-sided lapping and polishing machines, single-sided polisher, and substrate process chemicals. The company sells its products through sales personnel, as well as a network of independent sales representatives and distributors. Amtech Systems, Inc. was incorporated in 1981 and is headquartered in Tempe, Arizona.