I liked Lam Research
Of course, we're not exactly back to the "happy days are here again" point of the cycle, either. For the company's fiscal second quarter, sales were up almost 12% on a sequential basis, but still down 6% from last year. Likewise for earnings -- up nicely on a sequential basis and down modestly versus last year.
Not only were results for this quarter a lot better than initially expected, but it also seems like expectations for the future were on the low side as well. The company announced that orders were up 24% sequentially in this quarter, and the average estimate for the March period has gone up more than 10% since then (to say nothing of the stock price as well).
There are competitive threats, of course. Applied Materials
Perhaps that's true, but companies such as SanDisk
At the risk of hubris, Lam Research was an easy pick in January 2005. A year later, though, it's not quite so simple. Valuations have caught up in anticipation of a semiconductor recovery, and the easy money is off the table. Still, there's nothing saying that the company won't continue to outperform, and there's plenty of room for me-too investors to jump into the cycle and push all of these semiconductor equipment stocks higher.
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Fool contributor Stephen Simpson has no financial interest in any stocks mentioned (that means he's neither long nor short the shares).