Analog Devices Inc
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Information Technology : Semiconductors & Semiconductor Equipment | Large Cap Blend
Company profile

Analog Devices, Inc. (Analog Devices) is a semiconductor company. The Company designs, manufactures and markets a portfolio of solutions, including integrated circuits (ICs), software and subsystems that leverage analog, mixed-signal and digital signal processing technologies. Its products include Converters, Amplifiers/Radio Frequency and Microwave, Power Management and Reference, and Digital Signal Processing and System Products (DSPs). The Company's ICs are designed to address a range of real-world signal processing applications. It sells ICs to more than 125,000 end customers worldwide. Its IC product portfolio includes both general-purpose products as well as application-specific products designed for specific target markets. The Company's analog technology portfolio is comprised of sensor and actuator products, including products based on microelectromechanical systems (MEMS) technology. The Company's DSPs are used for high-speed numeric calculations.

Closing Price
$171.52
Day's Change
-1.69 (-0.98%)
Bid
--
Ask
--
B/A Size
--
Day's High
173.02
Day's Low
170.29
Volume
(Heavy Day)
Volume:
13,056,376

10-day average volume:
5,767,286
13,056,376

20 stocks that could rise as much as 39% as this key metric keeps improving

7:29 am ET July 13, 2021 (MarketWatch)
Print

By Philip van Doorn

As earnings season begins, analysts at Goldman Sachs say the stock market is placing more value on improving net margins

This has been another excellent year for U.S. stocks -- so far -- as the S&P 500 has returned 17%, following an 18% gain during 2020. Investors know that stocks are anything but cheap, so a good question to ask is what will the market reward for the rest of the year and 2022?

Goldman Sachs analyst David Kostin wrote in the firm's "U.S. Weekly Kickstart" note to clients July 9 that investors have "started to reward companies with attractive margin profiles." By this, he means net margin, which is a company's net income divided by net revenue.

Comparisons of net income margins may be most meaningful within industries, because some by their nature have low margins when measured this way. Kostin wrote: "Our sector-neutral factor of stocks with the highest vs. lowest profit margins has also started to outperform."

He and a team of Goldman Sachs analysts screened the S&P 500 for stocks with "above-average net interest margins, realized margin growth of 50+ bp [basis points] in 2020, and expected margin growth of 50+ bp in each of the next two years."

This led to a group of 32 large-cap stocks in six sectors expected to increase net margins by a median of 201 basis points this year and another 105 basis points in 2022, after defying the odds with profit margin expansion of at least 50 basis points during the pandemic year of 2020. The six sectors were communications services, consumer staples, health care, industrials, information technology and materials.

Stocks that made Goldman's list include Netflix Inc. (NFLX), Broadcom Inc. (AVGO) and Philip Morris International Inc. (PM).

Broad screen

To begin with a larger group of stocks and possibly produce a list with the most upside potential, we began with the S&P Composite 1500 Index , which is made up of the S&P 500, the S&P 400 Mid Cap Index (MID) and the S&P Small Cap 600 Index . We then took an "unfair" approach of screening by net income margin regardless of sector or industry and favoring companies that sailed through 2020.

All the numbers in the screen are for calendar years -- not fiscal years, which for many companies don't match the calendar.

Here's the screen:

Here are the 20 stocks that made the screen with at least 20% upside implied by consensus price targets:

Company  Est. net margin -- 2022  Est. net margin -- 2021  Net margin -- 2020  Net margin -- 2019  Share "buy" ratings  Closing price -- July 9  Cons. price target  Implied 12-month upside potential 
Boston Beer Co. Class A SAM  13.35%  12.30%  11.03%  8.80%  53%  $973.58  $1,352.80  39% 
Dorian LPG Ltd. LPG  39.31%  27.80%  25.02%  24.37%  86%  $12.80  $17.00  33% 
IAA Inc. IAA  18.31%  17.29%  14.07%  13.45%  90%  $54.98  $71.50  30% 
Take-Two Interactive Software Inc. TTWO  19.42%  18.42%  14.96%  11.81%  71%  $170.37  $221.27  30% 
Haemonetics Corp. HAE  14.80%  13.82%  12.23%  7.98%  86%  $63.48  $80.29  26% 
Activision Blizzard Inc. ATVI  34.57%  33.36%  27.16%  23.30%  88%  $92.38  $116.03  26% 
SPS Commerce Inc. SPSC  17.84%  16.68%  14.58%  12.08%  67%  $100.77  $125.29  24% 
FMC Corp. FMC  19.46%  18.51%  12.46%  11.70%  79%  $107.66  $133.12  24% 
First Horizon Corp. FHN  29.93%  29.02%  24.81%  19.39%  87%  $16.79  $20.54  22% 
Applied Materials Inc. AMAT  27.08%  26.52%  21.14%  18.73%  76%  $134.90  $161.92  20% 
Investors Bancorp Inc. ISBC  35.09%  34.27%  21.14%  17.87%  71%  $13.70  $16.29  19% 
Baxter International Inc. BAX  15.27%  14.18%  9.44%  8.81%  56%  $80.43  $94.25  17% 
Cirrus Logic Inc. CRUS  19.62%  19.07%  14.92%  12.52%  75%  $85.79  $100.27  17% 
Parker-Hannifin Corp. PH  14.48%  13.97%  10.60%  9.63%  77%  $311.57  $361.00  16% 
Netflix Inc. NFLX  17.35%  16.14%  11.05%  9.26%  76%  $535.98  $615.69  15% 
Sempra Energy SRE  21.63%  21.09%  18.35%  16.98%  60%  $132.86  $151.13  14% 
Aon PLC Class A AON  22.18%  21.42%  17.79%  13.92%  47%  $236.31  $266.33  13% 
Helen of Troy Ltd. HELE  14.11%  13.62%  11.54%  10.76%  40%  $215.25  $242.50  13% 
Monolithic Power Systems Inc. MPWR  29.35%  28.44%  19.47%  17.33%  79%  $382.60  $428.00  12% 
Analog Devices Inc. ADI  36.18%  35.12%  23.28%  21.60%  83%  $166.27  $185.80  12% 
Source: FactSet 

Click on the tickers for more about each company, including news, business profiles and price ratios. As always, do your own research to form your own opinion about a company's long-term viability before considering an investment.

Don't miss:Bank earnings preview -- pullback gives you an opportunity to buy the stocks (http://www.marketwatch.com/story/heres-your-chance-to-buy-bank-stocks-before-rising-interest-rates-boost-profits-11625766755)

-Philip van Doorn; 415-439-6400; AskNewswires@dowjones.com

	

(END) Dow Jones Newswires

July 13, 2021 07:29 ET (11:29 GMT)

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