KLA (NASDAQ:KLAC) Shares Gap Down Following Insider Selling

Key Points

• KLA Corporation's shares gapped down from a closing price of $955.41 to $924.23 following significant insider selling, with current trading at $904.12.
• Insider transactions included EVP Brian Lorig selling 8,049 shares for over $7 million and CEO Richard P. Wallace selling 10,801 shares, signifying a 41.22% and 10.42% reduction in their ownership stakes, respectively.
• Research firms have mixed ratings on KLA, with JPMorgan raising its price target to $1,070, while the company’s current consensus rating remains a "Hold" with an average target price of $890.59.

KLA Corporation (NASDAQ:KLAC - Get Free Report) gapped down prior to trading on Friday following insider selling activity. The stock had previously closed at $955.41, but opened at $924.23. KLA shares last traded at $904.12, with a volume of 415,808 shares traded.

Specifically, EVP Brian Lorig sold 8,049 shares of KLA stock in a transaction on Tuesday, August 12th. The shares were sold at an average price of $913.68, for a total transaction of $7,354,210.32. Following the sale, the executive vice president owned 11,479 shares in the company, valued at $10,488,132.72. The trade was a 41.22% decrease in their ownership of the stock. The transaction was disclosed in a filing with the Securities & Exchange Commission, which is available at this link. Also, CEO Richard P. Wallace sold 10,801 shares of the stock in a transaction on Tuesday, August 12th. The shares were sold at an average price of $913.68, for a total transaction of $9,868,657.68. Following the completion of the transaction, the chief executive officer owned 92,818 shares of the company's stock, valued at approximately $84,805,950.24. This represents a 10.42% decrease in their position. The disclosure for this sale can be found here.

Analysts Set New Price Targets

A number of research firms recently weighed in on KLAC. Cowen reissued a "hold" rating on shares of KLA in a research note on Thursday, May 1st. Citigroup upped their price objective on KLA from $1,035.00 to $1,060.00 and gave the company a "buy" rating in a research note on Friday, August 1st. UBS Group raised their target price on KLA from $775.00 to $960.00 and gave the stock a "neutral" rating in a research report on Monday, July 21st. Oppenheimer upped their price target on KLA from $740.00 to $950.00 and gave the company an "outperform" rating in a research report on Tuesday, June 17th. Finally, Barclays increased their price objective on KLA from $590.00 to $750.00 and gave the stock an "equal weight" rating in a research note on Monday, July 28th. Eleven analysts have rated the stock with a hold rating and eight have assigned a buy rating to the company's stock. According to MarketBeat, the company currently has a consensus rating of "Hold" and an average price target of $890.59.

KLA Price Performance

The company has a quick ratio of 1.83, a current ratio of 2.62 and a debt-to-equity ratio of 1.25. The stock's 50-day moving average price is $903.60 and its 200-day moving average price is $782.31. The company has a market capitalization of $116.57 billion, a price-to-earnings ratio of 29.07, a price-to-earnings-growth ratio of 2.98 and a beta of 1.44.

KLA (NASDAQ:KLAC - Get Free Report) last posted its quarterly earnings data on Thursday, July 31st. The semiconductor company reported $9.38 earnings per share for the quarter, topping the consensus estimate of $8.53 by $0.85. The firm had revenue of $3.17 billion during the quarter, compared to analysts' expectations of $3.08 billion. KLA had a net margin of 33.41% and a return on equity of 112.41%. KLA's revenue was up 23.6% on a year-over-year basis. During the same quarter in the previous year, the company posted $6.60 EPS. Equities research analysts anticipate that KLA Corporation will post 31.59 earnings per share for the current year.

KLA Dividend Announcement

The company also recently declared a quarterly dividend, which will be paid on Wednesday, September 3rd. Investors of record on Monday, August 18th will be issued a $1.90 dividend. The ex-dividend date is Monday, August 18th. This represents a $7.60 annualized dividend and a yield of 0.9%. KLA's dividend payout ratio (DPR) is currently 25.01%.

KLA announced that its Board of Directors has approved a share buyback program on Wednesday, April 30th that permits the company to repurchase $5.00 billion in shares. This repurchase authorization permits the semiconductor company to repurchase up to 5.4% of its stock through open market purchases. Stock repurchase programs are usually an indication that the company's leadership believes its shares are undervalued.

Institutional Trading of KLA

Institutional investors and hedge funds have recently added to or reduced their stakes in the company. Ulland Investment Advisors LLC bought a new stake in shares of KLA during the second quarter worth approximately $32,000. Sentry Investment Management LLC acquired a new position in shares of KLA in the 2nd quarter valued at $36,000. Activest Wealth Management grew its stake in shares of KLA by 4,100.0% during the first quarter. Activest Wealth Management now owns 42 shares of the semiconductor company's stock worth $29,000 after purchasing an additional 41 shares during the period. Alpine Bank Wealth Management acquired a new stake in shares of KLA during the first quarter worth $35,000. Finally, Olde Wealth Management LLC bought a new stake in KLA in the first quarter valued at about $36,000. 86.65% of the stock is owned by institutional investors.

About KLA

KLA Corporation, together with its subsidiaries, engages in the design, manufacture, and marketing of process control, process-enabling, and yield management solutions for the semiconductor and related electronics industries worldwide. It operates through three segments: Semiconductor Process Control; Specialty Semiconductor Process; and PCB and Component Inspection.