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Anatomy of Success: Lam Research Corporation (LRCX)

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At Zacks we stress the value of the Zacks Ranking system, and specifically the select few companies that earn a #1 ranking.  Only 5% of the Zacks Rank universe receives this grade, and over a 1-3 month time frame it has a long history of outperforming the markets.  The system helps you identify companies both big and small that are poised for near term growth.  

While the Zacks Rank is an excellent near term indicator for finding the best stocks, the system also helps you stay in the strongest ones while they continue to appreciate in price.  

Example: Lam Research Corporation

Lam Research Corporation (LRCX - Free Report) is a large-cap growth stock who designs, manufactures, markets and services semiconductor processing equipment used in the fabrication of integrated circuits.  The company is recognized as a leading supplier of front-end wafer processing equipment to the worldwide semiconductor industry.

On April 21, Lam received a Zacks Rank #1 designation just after management announced that they expected record shipments, and continued wafer fab equipment (WFE) strength through 2018.  Due to the announcement LRCX also saw unanimous positive estimate revisions from their coverage analysts. That morning the stock price opened at $139.15.  

Lam retained its Zacks Rank #1 going into their next earnings announcement just over three months later where the company easily beat both the Zacks consensus earnings and revenue estimates on July 26th.  Once again analysts increased future earnings guidance causing the stock price to jump up even further;  shares closed at $168.34, a +21% gain since LRCX was added to the Zacks Rank #1 list.  

Not surprisingly Lam Research remains a Zacks Rank #1, and as of September 20th, has gained another +3.2% for a total gain of +24.2% since the opening bell on April 21.  Over the same time period, the record breaking S&P 500 has posted a gain of +6.4%.  

The table below shows the performance of both Lam Research and the S&P 500 over the time frame LRCX has been a Zacks Rank #1.

Overall, by utilizing the Zack Ranking system you can easily find stocks that are best positioned to beat the market on a consistent basis, and how to retain the best stocks while they continue to grow.

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