3. KLA Corporation (NASDAQ:KLAC)
Force Hill Capital Management’s Stake Value: $19,238,000
Percentage of Force Hill Capital Management’s 13F Portfolio: 4.75%
Number of Hedge Fund Holders: 44
KLA Corporation (NASDAQ:KLAC) is a company providing process control and yield management systems to the semiconductor and nanoelectronics industries. Force Hill Capital Management purchased a $19.2 million stake in KLA Corporation (NASDAQ:KLAC) during the third quarter of 2021, which represents 4.75% of the fund’s Q3 investments.
On November 4, KLA Corporation (NASDAQ:KLAC) announced a per share quarterly dividend of $1.05, in line with previous. The dividend was paid on December 1 to shareholders of record on November 15.
KLA Corporation (NASDAQ:KLAC) reported its Q3 financial results on October 27. The company posted earnings per share of $4.64, beating estimates by $0.12. The quarterly revenue came in at $2.08 billion, up 35.44% from the prior-year quarter, outperforming estimates by $40.84 million.
Barclays analyst Blayne Curtis raised the price target on KLA Corporation (NASDAQ:KLAC) to $425 from $350 and kept an Equal Weight rating on the shares on January 12.
A total of 44 hedge funds reported owning stakes in KLA Corporation (NASDAQ:KLAC), valued at $1.84 billion. Alkeon Capital Management is the largest stakeholder of the company, with 1.6 million shares worth $551.5 million.
Here is what Palm Capital has to say about KLA Corporation (NASDAQ:KLAC) in its Q2 2021 investor letter:
“A final example of our thinking is in the semiconductor industry. Because of the extreme complexity and significant costs in the manufacturing process, the industry has become highly specialized. It has fragmented into three types of companies – the designers of chips, the manufacturers, and those that make equipment for the manufacturers.
Revenue for designers is somewhat stable because of patents. And even when patents expire, designs are not easily copied, and customers don’t easily switch because this would typically involve a redesign of their product and the risk that the new design does not work as well. However, revenue is still dependent on the length of the lifecycle of end products they are used for, how long it takes for those products to be replaced with new technology and the success of designers’ R&D into new designs. So, while near term revenue and profit margins are typically stable, medium to long term revenue and profits are uncertain. And the large customers in this industry such as Apple, Google and Amazon are all beginning to design their own chips, raising this uncertainty…
…On the other hand, revenue and profits for the companies that design and manufacture equipment for the manufacturers are steadier. An example of a company we like in this space is KLA. KLA provides tools and solutions to help manufacturers monitor and improve their highly complex manufacturing process and reduce costs. These are critical services to the manufacturers. Their tools are found in every major manufacturer globally. And the uniqueness of these tools is evidenced by KLA’s market share which is more than four times its nearest competitor. Regardless of which design is successful in the future or which manufacturer manages to take the lead, KLA’s tools will almost certainly still be needed. Its revenues and profits are less affected by technological change and therefore less uncertain that that of the designers and manufacturers.”
