You can add Analog Devices
It's a popular exercise these days, particularly in the semiconductor industry. You know the drill by now:
- Report earnings and/or sales at or above analyst expectations.
- Say something defensive about "soft consumer demand," "low end-market demand," or some variation on that theme.
- Watch the share price fall, no matter how good the just-reported results or how bright the long-term outlook.
But Mr. Market seems to be learning something from history here. Analog's stock actually outperformed the broader market the day after its fourth-quarter report. That gives some credit to a performance that included 35% year-over-year sales growth and more than double the earnings per share at $0.73. Gross margins are on the rise, Analog added a cool billion dollars to its share repurchase program, and the stock even sends a respectable 2.4% dividend yield to investors. All of this is on sale for less than 16 times trailing earnings and a PEG ratio of just 0.88.
What's not to like? If you want a smaller and more nimble version of Texas Instruments
All-Star CAPS player and Fool contributor Anders Bylund holds no position in any of the companies discussed here. Linear Technology is a Motley Fool Stock Advisor pick. Atheros is a Motley Fool Hidden Gems recommendation. The Fool owns shares of Atheros and TI. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. You can check out Anders' holdings and a concise bio if you like, and The Motley Fool is investors writing for investors.