A 10-Day Losing Streak Has KLA Stock Down 20%
KLA (KLAC) stock is on a 10-day losing streak, down 19.9% since the run began. That erased about $53.8 billion from the company’s market value, which now stands at about $216.5 billion. The stock closed at $165.74 on Friday, October 16, 45.0% below its 52-week high of $301.37 and 51.7% above its low of $109.29.
KLAC Versus The S&P 500
Returns for KLAC and the S&P 500 over the streak and the periods around it, all ending Friday, October 16 and including dividends:
| Return Period | KLAC | S&P 500 |
|---|---|---|
| 1 Day | -5.0% | -1.1% |
| 10 Days (Current Streak) | -19.9% | -0.8% |
| 1 Month (21 Trading Days) | -1.9% | 0.4% |
| 3 Months (63 Trading Days) | -20.1% | 3.2% |
| Year To Date | 36.9% | 12.9% |
| 1 Year (252 Trading Days) | 53.3% | 16.2% |
A Stock-Specific Slide, Or A Market Move?
The market explains little of this: the S&P 500 lost 0.8% over the same 10 sessions, including dividends, against KLA’s -19.9%. 1 other S&P 500 stock is currently on losing streaks of 10 days or longer. Over the past three months the stock is down 20.1%, a window that includes the streak; over the other 53 sessions of that window it was essentially flat (-0.2%).
Do The Fundamentals Justify The Selling?
On the fundamentals, revenue grew 11.7% over the last twelve months, against a median of 17.9% for S&P 500 Information Technology stocks; its operating margin is 41.7%, versus a median of 21.6%; and the stock trades at 44.8 times trailing earnings against a median of 34.0. The read is mixed: margins above the median on one side, revenue growth below the median on the other.
If the drop has you weighing an entry, resist buying on price alone. Our Buy the Dip screen ranks the marked-down names where growth and cash generation still hold up.
For anyone who would rather back the theme than one company, a semiconductor ETF like SMH holds the whole group, not just this stock. It is still a concentrated bet on one theme, which is the gap the portfolio below is built to close.
Weakness In One Name Should Be Noise, Not News
For a diversified holder, a streak like this is a data point. For a concentrated one, it is a hole in the plan. The difference is never the stock; it is the portfolio built around it.
Building that portfolio is what the Trefis High Quality (HQ) Portfolio does: roughly 30 businesses with the cash generation and balance-sheet strength to absorb a bad month, selected and rebalanced by rules. It has a track record of outpacing a benchmark that combines the S&P 500, the S&P MidCap 400, and the Russell 2000. Make the next streak, in either direction, someone else’s drama.