On October 5, 2023, financial services company Exchange Traded Concepts LLC reported a significant reduction in its stake in semiconductor company KLA Co. (NASDAQ:KLAC). According to their recent filing with the Securities & Exchange Commission, they lowered their holdings by 81.4% during the second quarter of this year. The firm now owns 1,807 shares of KLA’s stock after selling 7,916 shares, with a total value of $876,000 at the end of the reporting period.
This news comes after KLA announced its earnings for the second quarter on July 27th. The semiconductor company reported an impressive $5.40 earnings per share (EPS), surpassing the consensus estimate of $4.82 by $0.58. Additionally, they achieved a net margin of 32.27% and a return on equity of 138.06%. KLA generated revenue of $2.36 billion during this quarter, exceeding analysts’ expectations of $2.26 billion.
Comparing these results to the same period last year when KLA earned $5.81 EPS, we can see that their revenue for the quarter experienced a slight decline of 5.3% on a year-over-year basis. However, based on predictions made by equities research analysts, it is anticipated that KLA Co.’s EPS for the current fiscal year will reach 22.11.
In other news related to insider trading activities within the company, CFO Bren D. Higgins sold 3,061 shares on August 7th at an average price of $500 per share for a total transaction value of $1,530,500. Following this sale, Higgins now owns 47,818 shares valued at approximately $23,909,000.
It is important to note that another transaction took place on the same day involving CFO Bren D. Higgins selling an additional 3,061 shares for the same price and a total value of $1,530,500. After this sale, Higgins’ share ownership stands at 47,818 shares worth $23,909,000. These transactions were disclosed in legal filings with the Securities & Exchange Commission.
Furthermore, EVP Brian Lorig sold 2,738 shares of KLA’s stock on August 7th at an average price of $500 per share, resulting in a transaction worth $1,369,000. Following this sale, Lorig now holds 20,942 shares valued at approximately $10,471,000. The details of these sales can be found on the SEC website. Over the last three months leading up to this report, insiders have collectively sold 47,075 KLA Co. shares with a combined value of $23,465,095. However, it is important to note that corporate insiders own only 0.12% of the company’s stock.
On September 5th, KLA made an announcement through its Board of Directors regarding the authorization of a stock repurchase program. This program enables the company to buy back $2.00 billion worth of outstanding shares. With this repurchase authorization in place, KLA has the potential to reacquire up to 2.9% of its shares through open market purchases. Generally speaking, when a company initiates a share repurchase program like this one it suggests that leadership believes their stock is undervalued.
These recent developments suggest that KLA Co., despite experiencing a decrease in stake from Exchange Traded Concepts LLC and insider selling activities by key executives such as CFO Bren D. Higgins and EVP Brian Lorig within the past few months is still considered an attractive investment opportunity by equities research analysts based on their positive earnings results and revenue performance compared to previous years.
Large Investors Show Strong Interest in KLA Co. Stock: An Analysis of Recent Investment Activity and Company Performance
A Plethora of Large Investors Show Interest in KLA Co. Stock
In recent months, KLA Co., a prominent semiconductor company, has attracted the attention of several large investors who have made significant changes to their positions in the stock. One such investor is State Street Corp, which recently increased its ownership in KLA Co. by 0.8% during the first quarter. As a result, State Street Corp now controls an impressive 5,733,533 shares of the company’s stock, with an estimated value of $2,288,651,000 after acquiring an additional 47,838 shares in the last quarter.
Not to be outdone, Price T Rowe Associates Inc. MD also decided to bolster its position in KLA Co., raising its stake by 3.6% during the fourth quarter. This move has resulted in Price T Rowe Associates Inc. MD now owning an impressive 5,168,666 shares of the semiconductor company’s stock at a valuation of $1,948,742,000 after purchasing an additional 180,374 shares.
Envestnet Asset Management Inc., another notable investor in KLA Co., adopted a more astonishing strategy by increasing its position by a staggering 1,414.6% during the first quarter. This unprecedented move resulted in Envestnet Asset Management Inc. owning an astounding 3,870,976 shares of the company’s stock valued at $109,085,000 after acquiring an additional 3,615,391 shares.
Wellington Management Group LLP also demonstrated confidence in KLA Co.’s potential when it increased its holdings by a substantial 32% during the first quarter. With this remarkable decision paying off handsomely for Wellington Management Group LLP shareholders now hold approximately 2,950,724 shares worth $1 billion.
Last but not least among these noteworthy investors is Geode Capital Management LLC which increased its holdings significantly by 10.4% during the first quarter. This feat has resulted in Geode Capital Management LLC now holding a substantial 2,844,959 shares of the company’s stock with an estimated value of $1,133,396,000 after acquiring an additional 268,104 shares.
It is worth noting that institutional investors and hedge funds collectively own approximately 85.49% of KLA Co.’s outstanding shares, suggesting a high level of confidence in the company’s future prospects.
The stock market reacted positively to these developments as shares of KLAC opened at $461.05 on Thursday. However, it is important to consider both the low and high points witnessed by KLA Co.’s stock over the past year, with a 12-month low recorded at $250.20 and a 12-month high at $520.19. These figures indicate significant volatility within the company’s share price.
Moreover, when analyzing KLA Co.’s performance over time, it becomes evident that its financial standing remains solid as observed through its various moving averages such as the 50-day moving average which stands at $482.85 and its 200-day moving average at $444.98.
Furthermore, KLA Co. enjoys a remarkable market capitalization figure standing at an impressive $62.85 billion while boasting a price-to-earnings (PE) ratio of 19.14 and a favorable PEG (price-to-earnings growth) ratio of 2.21 which further enhances investor interest in this stock.
However, it is important to assess risk factors associated with investing in KLA Co., including its beta value of 1.36 indicating above-average volatility compared to the overall market trends. Additionally, it is essential to acknowledge the company’s debt-to-equity ratio which currently stands at 2.02 indicating relatively higher levels of debt when compared to equity.
An intriguing aspect for potential investors to consider is KLA Co.’s recent announcement of a quarterly dividend. Stockholders who had a record as of August 15th have been issued a $1.30 per share dividend, which was paid on September 1st. This payout represents an annualized dividend of $5.20 per share and delivers a dividend yield of 1.13%. Additionally, KLA Co.’s dividend payout ratio (DPR) currently stands at 21.59%, indicating that the company retains the majority of its earnings for future growth while still rewarding shareholders.
In conclusion, KLA Co. has attracted the attention of numerous large investors who have made significant changes to their positions in the company’s stock – showcasing their faith in its long-term potential. With notable institutional investors and hedge funds dominating its ownership, KLA Co.’s shares have seen fluctuations in value within the past year, yet it maintains solid financial standing as indicated by various moving averages and market capitalization figures. Investors should remain cautious about the level of risk associated with investing in this stock, taking into account both its high beta value and debt-to-equity ratio. Nonetheless, the recent declaration of a quarterly dividend further highlights KLA Co.’s commitment to rewarding shareholders while maintaining growth for future endeavors.