Shares of Lam Research Corporation (LRCX - Free Report) touched a new 52-week high of $107.72 on Nov 25, eventually closing at $107.54. The company returned 38.5% in the past one year and has added roughly 35.4% year to date. Average volume of shares traded over the last three months was approximately 2,615K.
What's Driving Lam Research?
Lam Research is a leading global provider of innovative wafer fabrication equipment and services to the semiconductor industry.
Lam Research’s various initiatives, such as product enhancements, solid execution and decent fiscal first-quarter 2017 results are some of the catalysts driving the stock. The company continues to see strong success in the areas of device architecture, process flow and technology inflections.
In the fiscal first quarter, Lam Research delivered decent results with earnings outperforming our estimates. Lam’s revenues and shipments were both up from the year-ago quarter.
Also, management provided a decent guidance for the fiscal second quarter. The company expects revenues of approximately $1.84 billion (+/- $75 million). Shipments are projected to be roughly $1.85 billion (+/- $75 million).
Recently, Lam Research increased its quarterly dividend by about 50% to 45 cents a share from the prior payout of 30 cents. The increased dividend will be paid on Jan 4, 2017 to stockholders on record as of Dec 14, 2016. Concurrently, the board authorized the company to buy back up to $1 billion worth shares, which can be executed over the next 12 to 18 months.
Regular share buybacks and dividend hikes are a good way of building investor confidence as these return shareholder value. The increase in dividend indicates that the company is heading toward strong growth.
Moreover, Lam is strongly positioned to benefit from technology inflections in the memory market where it is a dominant player. Leading edge technology spending in the logic and foundry segments is also expected to accelerate in the back half of the calendar year.
Additionally, Lam Research delivered an average positive earnings surprise of 7.46% in the trailing four quarters backed by its robust business portfolio.
Lam Research currently carries a Zacks Rank #2 (Buy).
Some other stocks worth considering in the industry are Cognex Corporation (CGNX - Free Report) , Itron, Inc. (ITRI - Free Report) and Teradyne Inc. (TER - Free Report) all with a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Cognex Corporation delivered a positive earnings surprise of 24.92% in the trailing four quarters.
Itron, Inc. delivered a positive earnings surprise of 30.55%, on average, in the trailing four quarters.
Teradyne Inc. delivered a positive earnings surprise of 19.26% in the trailing four quarters.
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