Report

Model Portfolio Update: Lam Research Provides Intriguing Long-term Guidance

This is an update to our model portfolio report, 37 Stocks for March 2018.

Underlyings
CBRE GROUP INC

CBRE Group is a holding company. Through its subsidiaries, the company is a commercial real estate services and investment firm. The company's segments include: Advisory Services, which provides a range of services globally, including property leasing and capital markets; Global Workplace Solutions, which provides a suite of integrated, contractually-based outsourcing services globally for occupiers of real estate; and Real Estate Investments, which is comprised of investment management services provided globally, development services in the United States and United Kingdom and a service designed to help property occupiers and owners meet the demand for flexible office space solutions on a global basis.

CMC Materials Inc.

Cabot Microelectronics supplies polishing slurries and pads used in the manufacture of integrated circuit (IC) devices within the semiconductor industry, in a process called chemical mechanical planarization (CMP). The company develops, produces and sells CMP slurries for polishing many of the conducting, insulating and isolating materials used in IC devices, and also for polishing the disk substrates and magnetic heads used in hard disk drives. In addition, the company develops, manufactures and sell CMP polishing pads, which are used in conjunction with slurries in the CMP process. The company also pursue other surface modification applications through its Engineered Surface Finishes business.

Lam Research Corporation

Lam Research is a supplier of wafer fabrication equipment and services to the semiconductor industry. The company designs, manufactures, markets, refurbishes, and services semiconductor processing equipment used in the fabrication of integrated circuits. The company's customer base includes semiconductor memory, foundry, and integrated device manufacturers that make products such as non-volatile memory, dynamic random-access memory, and logic devices. The company's services include customer service, spares, improvement, and refurbishment of its deposition, etch, and clean products. The company sells its products and services to companies in the United States, China, Europe, Japan, Korea, Southeast Asia, and Taiwan.

Micron Technology Inc.

Micron Technology provides memory and storage solutions. The company's portfolio of memory and storage technologies include Dynamic Random Access Memory, Not And, 3D XPoint? memory, and Not Or. The company's segments are: Compute and Networking Business, which includes memory products sold into client, cloud server, enterprise, graphics, and networking markets; Mobile Business, which includes memory products sold into smartphone and other mobile-device markets; Storage Business, which includes Solid-State Drives and component-level solutions sold into enterprise and cloud, client, and consumer storage markets; and Embedded Business, which includes memory and storage products.

Seagate Technology PLC

Trinity Industries Inc.

Trinity Industries is a provider of railcar products and services in North America. The company has the following reportable segments: Railcar Leasing and Management Services Group, which provides operating leases for freight and tank railcars, as well as originates and manages railcar leases for third-party investors and provides fleet maintenance and management services to industrial shippers; Rail Products Group, which manufactures freight and tank railcars in North America used for transporting a variety of liquids, gases, and dry cargo, and also provides a range of maintenance services and solutions; and All Other, which includes the company's highway products business.

Provider
Ascendere Associates LLC
Ascendere Associates LLC

J. Stephen Castellano founded Ascendere Associates LLC to provide innovative equity research and investment advisory services that blends fundamental and quantitative approaches.

In general, our approach is quite simple -- we believe that return on invested capital and long-term earnings growth are key to stock valuation.  More specifically, we use powerful and unique financial models that combine publicly available data, consensus estimates and our own inputs to generate consistent and actionable stock recommendations. 

Among the services that Ascendere provides are: 1) detailed custom equity research analysis; 2) valuation scenario analysis studies; 3) long/short model portfolio strategies; 4) long and short idea generation; 5) portfolio feedback; 6) detailed fundamental financial modeling services; and 7) additional analytical consulting services. Recent financial modeling consulting clients have included several notable startups as well as BCG Platinion, the risk management division of Boston Consulting Group.  

Mr. Castellano has over 20 years of experience in equity research and related consulting work.  At PaineWebber, Warburg Dillon Read and Credit Lyonnais Securities he developed fundamental equity valuation models and conducted in-depth research on the steel and telecom services industries.  At Boston Private Value Investors, he developed quantitative models for stock idea generation and also provided general fundamental equity research coverage. Steve received a MBA from the F. W. Olin School of Business at Babson College (2005) and a BA from Oberlin College (1993). 

Mr. Castellano's career history is highlighted below:

  • Ascendere Associates, LLC (2009-Present)
  • Boston Private Value Investors , Equity Research, Equity Research Analyst (2005-2009)
  • Pyramid Research, Contract Consultant, Telecom Services (2002-2003)
  • Credit Lyonnais Securities (USA), Equity Research, Telecom Services, Vice President (2000-2001)
  • Warburg Dillon Read, Equity Research, Telecom Services, Research Associate (1999-2000)
  • PaineWebber, Equity Research, Steel and Nonferrous Metals, Research Associate, Editor (1995-1999)

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