EarningsBeats.com Digest

Published: Fri, 10/25/19

EarningsBeats.com Digest for October 25, 2019

Dear EarningsBeats Digest Member.

EarningsBeats.com Membership

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At your service,

John Hopkins

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A Blowout Report from a Leader in Semiconductors

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The whole idea with relative strength is to gain an understanding of what Wall Street believes about individual stocks. They place their bets and we can generally get a good idea of which bets they've placed by simply charting the relative strength or weakness of individual companies. Looking at Lam Research (LRCX), it's very easy to see that Wall Street was banking on a solid quarterly earnings report:

If ever I would hold a "trade" into an earnings report (which I don't), it would be a stock like LRCX which clearly was expected by Wall Street to deliver a beat. On Wednesday, after the bell, LRCX delivered a very solid earnings report (EPS 3.18 vs 3.00) and the market responded with a 13.9% surge in price. It also led an industry-wide rebound from the disaster caused by Texas Instruments' (TXN) less-than-stellar report. The Dow Jones U.S. Semiconductors Index ($DJUSSC) had lost 75 points, or roughly 2%, after the TXN report, but recovered 76 points yesterday. The LRCX revenue and earnings beat also set up companies like Applied Materials (AMAT, +8.98%) and KLA Corp (KLAC, +6.31%) for potential beats when they report their quarterly results. KLAC reports on October 31st, while AMAT doesn't report until November 13th.

Happy trading!

Tom Bowley

Chief Market Strategist

EarningsBeats.com
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