Tom
Yes, indeed, I have owned ADI for quite some time. Some good, some Ok returns. Not sure what they could do in the near term to make the price jump. Certainly selling off product lines, assets that are underperforming should help.
Note that the sale is only for the application specific DSP products, not the general purpose DSP's which according to the last post, has had increased revenues. I don't see them selling the entire DSP line. I don't know how much of the market share in DSP land they can claim (my guess is about 15%), but by far, Texas Inst. has the bulk of that market(my guess 50+ %).
ADI does still lead in the data converters (analog-digital, digital-to-analog) market share. That is important in many end-product areas. The linear space (op amps) is also a strong area for ADI. Not sure of market share here, but they are a big player.
ADI does release many new products per year, so they do invest in R&D to get those products in the pipeline.
They also has their own fab's which can be a substantial drain due to large overheads. If the utilization rates on the fabs is high, then owning them makes sense to me. They do farm out some production of products, specifically the DSP chips to TMSC in Taiwan.
Over semiconductor growth rates are projected to be in the 9-10% range going forward - again notwithstanding some global slowdown. Do sales trend higher? Seems like the stock is not reflecting that for sure. I don't know what would trigger a significant uptick in price, other than better numbers being talked about my management. So, it seems like ADI is stuck in neutral for now, enhanced somewhat by the dividend payments.
The options crap is ugly. Fishman and ADI have paid fines. Not sure if Fishman should be sacked, but certainly, he has been paid handsomely with those tainted options (as were many other tech company exec's).
Re: Intel/ADI not sure this has legs. It had been speculated before with ADI and INTC were working on a DSP together. M&A activity has picked up in other areas. I do think INTC needs more varied product portfolio. ADI would be a nice fit - IMO.
Jim |
