Lam Research Stock: 6 Straight Red Days, Down 11%
Shares of Lam Research (LRCX) have closed lower in each of the last 6 sessions, a cumulative decline of 10.9%. That erased about $47.5 billion from the company’s market value, which now stands at about $387.3 billion. The stock closed at $309.56 on Monday, October 12, 28.5% below its 52-week high of $432.87 and 136.7% above its low of $130.77.
How The Streak Stacks Up Against The S&P 500
Returns for LRCX and the S&P 500 over the streak and the periods around it, all ending Monday, October 12 and including dividends:
| Return Period | LRCX | S&P 500 |
|---|---|---|
| 1 Day | -2.9% | -0.1% |
| 6 Days (Current Streak) | -10.9% | 1.1% |
| 1 Month (21 Trading Days) | 3.9% | 2.0% |
| 3 Months (63 Trading Days) | -10.5% | 3.8% |
| Year To Date | 81.4% | 15.1% |
| 1 Year (252 Trading Days) | 120.6% | 17.3% |
A Stock-Specific Slide, Or A Market Move?
Over the same 6 trading days, the S&P 500 returned +1.1% including dividends, so the slide is mostly Lam Research’s own story rather than the market’s. 2 other S&P 500 stocks are currently on losing streaks of 6 days or longer. Over the past three months the stock is down 10.5%, a window that includes the streak; over the other 57 sessions of that window it was essentially flat (+0.5%).
Is The Business As Weak As The Stock?
On the fundamentals, revenue grew 26.0% over the last twelve months, against a median of 17.9% for S&P 500 Information Technology stocks; its operating margin is 35.3%, versus a median of 21.6%; and the stock trades at 53.3 times trailing earnings against a median of 36.9. The read is mixed.
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.
Prefer the theme to the single name? 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.