A wise investment decision involves buying well-performing stocks at the right time and selling those that are at risk. A rise in share price and strong fundamentals signify a stock’s bullish run.
Lam Research Corporation (LRCX - Free Report) has been performing well so far this year and has the potential to carry the momentum in the near term. If you haven’t taken advantage of the share price appreciation yet, it’s time you add the stock to your portfolio.
Why an Attractive Pick?
Share Price Appreciation: A glimpse of the company’s price trend reveals that the stock had an impressive run on the bourse year to date. Lam Research returned 62.4%, which compared favorably with the industry’s gain of 44.6%.
Favorable Rank & Growth Score: Lam Research currently sports a Zacks Rank #1 (Strong Buy) and has a Growth Score of B. Our research shows that stocks with a Growth Style Score of A or B combined with a Zacks Rank #1 or #2 (Buy), offer the best investment opportunities in the growth investing space. These are fundamentally strong businesses aiming at making money for investors in the long run. Thus, the company appears to be a compelling investment proposition at the moment.
Northward Estimate Revisions: Six estimates for fiscal 2017 moved north over the past 60 days, reflecting analysts’ confidence in the company. Over this period, the Zacks Consensus Estimate for the current year increased 15.1%.
Positive Earnings Surprise History: Lam Research has an impressive earnings surprise history. The company outpaced the Zacks Consensus Estimate in the trailing four quarters, delivering a positive average earnings surprise of 4.44%.
Strong Growth Prospects: The company’s Zacks Consensus Estimate for fiscal 2017 earnings of $12.61 reflects year-over-year growth of 26.39%. Moreover, earnings are expected to register 5.15% growth in fiscal 2018. The stock has long-term expected earnings per share growth rate of 17.2% versus industry’s growth rate of 15.8%.
Growth Drivers: Lam Research is a leading global provider of innovative wafer fabrication equipment and services to the semiconductor industry.
The company has high exposure to the memory segment, which is likely to witness tremendous growth in the next few years. The company will benefit from the increasing demand for NAND and DRAM memory chips. These chips are being utilized in artificial intelligence, the Internet of Things (IoT), cloud computing and other emerging technologies.
Also, the company is doing well and expects success in areas such as device architecture, process flow and advanced packaging technology inflections.
Lam Research continues to see increased adoption rates for 3D NAND technology, FinFETs and multi-patterning. The company has undertaken cost-reduction activities and density scaling for 3D NAND and new memory technologies.
Other Stocks to Consider
Some other top-ranked stocks in the broader technology sector are Applied Materials, Inc. (AMAT - Free Report) , Stamps.com Inc. (STMP - Free Report) and Activision Blizzard, Inc. (ATVI - Free Report) , each sporting a Zacks Rank #1.You can see the complete list of today’s Zacks #1 Rank stocks here.
Long-term earnings growth rate for Applied Materials, Stamps.com and Activision are currently projected to be 17.1%, 15.0% and 13.6%, respectively.
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