5 Best Cheap Semiconductor Stocks to Buy and Hold

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In this article, we will look at the 5 best cheap semiconductor stocks to buy and hold. If you want to explore more semiconductor stocks that have strong long-term growth stories, you can read 10 Best Cheap Semiconductor Stocks to Buy and Hold.

5. Lam Research Corporation (NASDAQ:LRCX)

PE Ratio as of August 29: 13.81

Number of Hedge Fund Holders: 56

On July 27, Lam Research Corporation (NASDAQ:LRCX) reported its financial results for the fourth quarter of its fiscal 2022. The company reported earnings per share of $8.83, outperforming expectations by $1.50. The company’s revenue for the quarter amounted to $4.64 billion, up 11.83% year-over-year, and beating Wall Street estimates by $422 million.

For the first quarter of fiscal 2023, Lam Research Corporation (NASDAQ:LRCX) expects its earnings per share to range between $8.75 and $10.25, while revenue is expected to range between $4.6 billion and $5.2 billion. Wall Street expects the company to deliver EPS of $8.82 and revenue of $4.63 billion.

On July 28, Wells Fargo analyst Joe Quatrochi raised his price target on Lam Research Corporation (NASDAQ:LRCX) to $475 from $460 and maintained an ‘Equal Weight’ rating on the shares.

On August 25, Lam Research Corporation declared a quarterly cash dividend of $0.225 per share, up 15% from its prior dividend of $1.50 per share. The dividend is payable on October 5 to investors of record on September 14. As of August 29, Lam Research Corporation (NASDAQ:LRCX) is trading at a PE multiple of 13.8-times earnings and the shares offer a forward dividend yield of $1.29%, which the company backs with free cash flow of $2.55 billion.

At the close of Q2 2022, 56 hedge funds were bullish on Lam Research Corporation (NASDAQ:LRCX), holding stakes worth $2.66 billion. Of those, Fisher Asset Management was the largest shareholder in the company with a stake worth $849 million. The investment covers 0.6% of Ken Fisher’s 13F portfolio.

Here is what Artisan Partners had to say about Lam Research Corporation (NASDAQ:LRCX) in its second-quarter 2022 investor letter:

Lam is one of the world’s largest suppliers of semiconductor wafer fabrication equipment (WFE). Manufacturing semiconductors is incredibly complex with tolerances measured in nanometers. Consistent improvements in technology are necessary for manufacturers to improve the cost, functionality and volume of semiconductors. WFE manufacturers such as Lam provide the necessary machines and technology. The WFE industry is highly consolidated with only five global players holding more than two thirds of the market. Because of the value-added nature of the equipment and services, the industry is highly profitable with margins and returns on capital that most CEOs can only dream of.”

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