How Do Hedge Funds Feel About Lam Research Corporation (LRCX)?

A whopping number of 13F filings filed with U.S. Securities and Exchange Commission has been processed by Insider Monkey so that individual investors can look at the overall hedge fund sentiment towards the stocks included in their watchlists. These freshly-submitted public filings disclose money managers’ equity positions as of the end of the three-month period that ended June 30th, so let’s proceed with the discussion of the hedge fund sentiment on Lam Research Corporation (NASDAQ:LRCX).

Lam Research Corporation (NASDAQ:LRCX) was in 58 hedge funds’ portfolios at the end of June. The all time high for this statistic is 62. LRCX investors should be aware of an increase in enthusiasm from smart money of late. There were 54 hedge funds in our database with LRCX positions at the end of the first quarter. Our calculations also showed that LRCX isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings).

Why do we pay any attention at all to hedge fund sentiment? Our research has shown that a select group of hedge fund holdings outperformed the S&P 500 ETFs by 79 percentage points since March 2017 (see the details here). That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.


Philippe Laffont of Coatue Management

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium mining is one of the fastest growing industries right now, so we are checking out stock pitches like this emerging lithium stock. We go through lists like the 10 best EV stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our homepage. Now let’s take a look at the key hedge fund action regarding Lam Research Corporation (NASDAQ:LRCX).

Do Hedge Funds Think LRCX Is A Good Stock To Buy Now?

Heading into the third quarter of 2021, a total of 58 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 7% from the first quarter of 2020. The graph below displays the number of hedge funds with bullish position in LRCX over the last 24 quarters. With the smart money’s sentiment swirling, there exists a few key hedge fund managers who were adding to their stakes significantly (or already accumulated large positions).

According to Insider Monkey’s hedge fund database, Rajiv Jain’s GQG Partners has the biggest position in Lam Research Corporation (NASDAQ:LRCX), worth close to $982.6 million, comprising 2.9% of its total 13F portfolio. The second most bullish fund manager is Ken Fisher of Fisher Asset Management, with a $694 million position; 0.4% of its 13F portfolio is allocated to the company. Remaining peers that are bullish encompass Philippe Laffont’s Coatue Management, Panayotis Takis Sparaggis’s Alkeon Capital Management and Ken Griffin’s Citadel Investment Group. In terms of the portfolio weights assigned to each position Marlowe Partners allocated the biggest weight to Lam Research Corporation (NASDAQ:LRCX), around 24.66% of its 13F portfolio. Crosslink Capital is also relatively very bullish on the stock, designating 8.33 percent of its 13F equity portfolio to LRCX.

As one would reasonably expect, key hedge funds have jumped into Lam Research Corporation (NASDAQ:LRCX) headfirst. Coatue Management, managed by Philippe Laffont, created the most valuable position in Lam Research Corporation (NASDAQ:LRCX). Coatue Management had $377 million invested in the company at the end of the quarter. Matthew Hulsizer’s PEAK6 Capital Management also made a $35.1 million investment in the stock during the quarter. The following funds were also among the new LRCX investors: Ray Dalio’s Bridgewater Associates, Scott Bessent’s Key Square Capital Management, and Michael Gelband’s ExodusPoint Capital.

Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Lam Research Corporation (NASDAQ:LRCX) but similarly valued. We will take a look at Airbnb, Inc. (NASDAQ:ABNB), British American Tobacco plc (NYSE:BTI), Infosys Limited (NYSE:INFY), Booking Holdings Inc. (NASDAQ:BKNG), PetroChina Company Limited (NYSE:PTR), BP plc (NYSE:BP), and Zoetis Inc (NYSE:ZTS). This group of stocks’ market caps are closest to LRCX’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
ABNB 58 2711062 6
BTI 12 1011787 -2
INFY 22 2158547 -4
BKNG 100 6943746 -3
PTR 8 85856 0
BP 30 1080625 1
ZTS 58 2705785 0
Average 41.1 2385344 -0.3

View table here if you experience formatting issues.

As you can see these stocks had an average of 41.1 hedge funds with bullish positions and the average amount invested in these stocks was $2385 million. That figure was $3719 million in LRCX’s case. Booking Holdings Inc. (NASDAQ:BKNG) is the most popular stock in this table. On the other hand PetroChina Company Limited (NYSE:PTR) is the least popular one with only 8 bullish hedge fund positions. Lam Research Corporation (NASDAQ:LRCX) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for LRCX is 64.2. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 25.7% in 2021 through September 27th and beat the market again by 6.2 percentage points. Unfortunately LRCX wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on LRCX were disappointed as the stock returned -5.2% since the end of June (through 9/27) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as many of these stocks already outperformed the market since 2019.

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Disclosure: None. This article was originally published at Insider Monkey.