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Andreas in Insider trading,

Lam Research demonstrates upside potential

Lam Research Corporation (LRCX), one of the leaders among producers of equipment for the semiconductor industry, has recently posted upbeat financial results for the first quarter of FY 2016. The report suggests the company’s revenue grew 39% y-o-y (+8% q-o-q) to USD 1.6 bn, while adjusted EPS increased 90% y-o-y to USD 1.82, 12 cents above the median consensus. Sales in Southeast Asia accelerated at the fastest pace (+116% q-o-q). Lam Research is generating a good cash flow, which allows the company to buy back shares and pay generous dividend. Hence, in the reporting quarter the company repurchased USD 98 mn of its shares and paid dividend of 30 cents (+67% y-o-y), with the dividend yield totaling 1.5%. The company announced it had purchased KLA-Tencor, another producer of semiconductor equipment, which may become the main growth driver. This purchase entails considerable synergyand will have a positive impact on the company’s quotations. I recommend purchasing Lam Research (LRCX) in the middle term.