Big Money Boosts Lam Research

And the semiconductor supplier could rise even higher due to sky-high demand across multiple business segments as well as international capacity expansion. But another likely reason is Big Money lifting the stock.

So, what’s Big Money? Said simply, that’s when a stock goes up in price alongside chunky volumes. It’s indicative of institutions betting on the shares.

Smart money managers are always looking for the next hot stock. And Lam Research has many fundamental qualities that are attractive.

This sets up well for the stock going forward. But how the shares have been trading points to more upside. As I’ll show you, the Big Money has been consistent in the shares all year.

You see, fund managers are always looking to bet on the next outlier stocks…the best in class. They spend countless hours sizing up companies, reading reports, speaking to analysts…you name it. When they find a company firing on all cylinders, they pounce in a big way.

That’s why I’ve learned how critical it is to gauge Big Money demand for shares. To show you what I mean, have a look at all the big money signals LRCX has made the last year. Each green bar signals big trading volumes as the stock ramped in price:

Source: www.mapsignals.com

In 2021, the stock has attracted 8 Big Money buy signals. They occurred months ago, but that could mean opportunity since the stock has been range bound lately.

Now, let’s check out technical action grabbing my attention:

• 1-month outperformance vs. Technology Select Sector SPDF Fund (+3.5% vs. XLK)

Outperformance is important for leading stocks.

Next, it’s a good idea to check under the hood. Meaning, I want to make sure the fundamental story is strong too. As you can see, Lam Research has been growing sales at a double-digit rate. Take a look:

• 3-year sales growth rate (+12.3%)
• 3-year earnings growth rate (+26.9%)

Source: FactSet

Marrying great fundamentals with technically superior stocks is a winning recipe over the long-term.

In fact, LRCX has been a top-rated stock at my research firm, MAPsignals, for years. That means the stock saw buy pressure, strong technicals, and growing fundamentals. We have a ranking process that showcases stocks like this on a weekly basis.

LRCX has a lot of qualities that are attracting Big Money. And since 2015, it’s made this list 43 times, with its first appearance on 6/2/2015… and gaining 649.78% since. The blue bars below show the times that Lam Research was a top pick since 2015:

Source: www.mapsignals.com

It’s been a top stock in the technology sector according to the MAPsignals process. I wouldn’t be surprised if LRCX makes additional appearances in the years to come. Let’s tie this all together.

The Bottom Line

Lam Research rally could have further to go. Big money buying in the shares is signaling to take notice. Shares could be positioned for further upside. Given the historical gains in share price and strong fundamentals, this stock could be worth a spot in a growth-oriented portfolio.

Disclosure: the author holds positions in LRCX in personal and managed accounts at the time of publication.

Learn more about the MAPsignals process here.

Disclaimer

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