Vltava Fund, an investment management company, recently released its fourth-quarter 2024 investor letter. A copy of the letter can be downloaded here. It has been 16 years since the fund transitioned from its initial investment strategy to the current one. Throughout this entire time, the fund has achieved an average annual return of 12%. The letter discussed about the book Hidden Investment Treasures by Daniel Gladiš. The investment cases outlined in Hidden Investment Treasures account for over 80% of Vltava Fund’s current portfolio. This document offers a thorough and detailed overview of the fund’s joint holdings and the reasons behind investment choices. In addition, please check the fund’s top five holdings to know its best picks in 2024.
Vltava Fund highlighted stocks like Lam Research Corporation (NASDAQ:LRCX) in the fourth quarter 2024 investor letter. Lam Research Corporation (NASDAQ:LRCX) designs, manufactures, markets, refurbishes, and services semiconductor processing equipment. The one-month return of Lam Research Corporation (NASDAQ:LRCX) was 3.18%, and its shares gained 3.08% of their value over the last 52 weeks. On January 7, 2025, Lam Research Corporation (NASDAQ:LRCX) stock closed at $77.52 per share with a market capitalization of $99.74 billion.
Vltava Fund stated the following regarding Lam Research Corporation (NASDAQ:LRCX) in its Q4 2024 investor letter:
“In the quarter just ended, we added to the portfolio two new companies from the technology sector: Applied Materials and Lam Research Corporation (NASDAQ:LRCX). Both are in the same industry as is another of our investments that we have held for some time, KLA Corporation. This industry is termed semiconductor devices and materials. One chapter in Hidden Investment Treasures is devoted to investing in technology companies and, among other things, the controversy over what really constitutes a technology company. As investors, we try to view technology companies not according to the industry into which they are formally classified but by whether the technologies and technological processes used in the production of their products and services are an essential element in value creation or if they are a source of long-term, sustainable competitive advantage. Among the companies that are formally categorized as technology-based and fall into either the Information Technology or the Communications Services sector, we find some that can be said to be just that but also others for which this classification is at least debatable. Similarly, among companies that do not formally belong to these two sectors, we find many that clearly are built to a large extent on technology and base their market positions and competitiveness on it. In the cases of Applied Materials and Lam Research, there can be no doubt that these are technology companies not only as a formality but also in fact.
Dozens of companies are directly or indirectly involved in the production of semiconductors. Within this broad group of companies, there are several without which it would not be possible to produce advanced types of semiconductors in the world today. These include a group of five very well-known companies, each of which has a dominant global position in its particular field, and which together operate more or less as oligopolies. These are Lam Research, Applied Materials, KLA Corporation, ASML, and Tokyo Electron. At the end of the year, we benefited from a significant correction in the share prices of Applied Materials and Lam Research, and, together with KLA Corporation, we now own three of them. We view these as one collective investment into a critical point within a very important segment of the global economy that is growing and will continue to grow over the long term.
Lam Research manufactures wafer fabrication equipment for the semiconductor industry and also provides related services. The company is a market leader in plasma etching, thin film deposition platforms, photoresist systems, as well as wet and plasma-based cleaning products for individual wafers. Its main customers are the four major semiconductor manufacturers Micron, Samsung, SK Hynix, and Taiwan Semiconductors. Lam Research is a business with net margins of around 27% and ROCE of about 30%. Capital outlays are relatively small. The company has good capital allocation with a preponderance of share buybacks…” (Click here to read the full text)
A technician operating an automated semiconductor processing machine with laser accuracy.
Lam Research Corporation (NASDAQ:LRCX) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 58 hedge fund portfolios held Lam Research Corporation (NASDAQ:LRCX) at the end of the third quarter which was 84 in the previous quarter. Lam Research Corporation’s (NASDAQ:LRCX) revenue for the third quarter was $4.17 billion, an increase of 8% from the prior quarter. While we acknowledge the potential of Lam Research Corporation (NASDAQ:LRCX) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
In another article, we discussed Lam Research Corporation (NASDAQ:LRCX) and shared AI news investors shouldn’t miss. In addition, please check out our hedge fund investor letters Q4 2024 page for more investor letters from hedge funds and other leading investors.
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Disclosure: None. This article is originally published at Insider Monkey.